Coinbase Global Stock Forecast: COIN continues sell-off in Tuesday premarket

Coinbase Global (COIN), the largest US crypto exchange, plummeted 11.4% on Monday and looks set to lose even more ground in Tuesday's premarket. The primary reason for the sell-off has been the cratering of the entire crypto market as the Celsius Network, known for handing out staggering levels of interest on crypto deposits, closed its withdrawal window over the weekend.

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Despite Bitcoin and much of the rest of the crypto market beginning to reverse higher early Tuesday morning (EST), COIN stock is down another 1.6% to $51.18 at the time of writing. There is some talk on social media that Bitcoin may have bottomed at 10 PM EST Monday night near $21,033. BTC is off more than 52% year to date, while Coinbase stock is off 79% over the same period. 

Coinbase Stock News: Celsius reminds investors of Luna crash

The elephant in the room is the Celsius shake-up. Celsius Network paused all withdrawals on Sunday and at present has still not changed the policy. Citing "extreme market conditions", Celsius sent a note to its 1.5 million customers, who up until recently held more than $11 billion in crypto on the network, explaining the withdrawal halt. The memo said, "We are taking this necessary action for the benefit of our entire community in order to stabilize liquidity and operations while we take steps to preserve and protect assets."

The action may have stabilized the assets held by Celsius, but it horrified the market. Just weeks ago the Luna network collapsed after its stablecoin could not hold its $1 peg. All this news is worrisome for Coinbase investors, because a fearful market means heavy selling at lower prices rather and a reduction in active users who may never return.

Back in May, Coinbase reported $1.17 billion in revenue for the first quarter, which missed the consensus $1.48 billion by 21%. The earnings per share (EPS) loss of $-1.26 took analysts off guard as they had expected positive earnings per share of $0.91. The US exchange reported EPS of $3.80 in Q1 2021. 

Coinbase's shattered share price is just the latest in a number of issues affecting the exchange. Only last week it was reported that an anonymous petition on the Mirror.xyz platform said to be from employees was calling for the dismissal of top executives. Chief operating officer Emilie Choi, chief product officer Surojit Chatterjee, and chief people officer LJ Brock were specified as causing egregious internal strategic errors like hiring new employees only to then rescind the offers before the new employees' first day.

Coinbase Stock Forecast: Trading for less than 2x cash

COIN stock has been in a downtrend since going public more than a year ago, and there is no reason to think it is even near its bottom yet. The Moving Average Convergence Divergence (MACD) indicator demonstrates that price action looks to continue its descent in the near term. However, the company had about $6.12 billion in cash at the end of its most recent quarter, so that would equate to approximately $27.58 per share. That is FXStreet's ultimate bottom. It should be noted that the average analyst still has a price target of $149.17 on COIN stock.

The 4-hour chart below shows that Coinbase shares are trending down toward the May 12 low at $40.84, although they still have a ways to go. Since this is fairly close to $$27.58 in dollar terms, we think it serves as a decent entry point. Getting too much below $40.84 would mean it was trading for the cash on its balance sheet and not much more. It is already trading for less than two times cash! At its current share price, it is already a prime target for a takeover. 

COIN 4-hour chart

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