Crypto Boom Helping Shares

Shares in the leading global crypto-broker Coinbase are trading sharply higher this week as the ongoing surge in crypto prices drives up trading volumes and deposits. Coinbase shares suffered heavily over the crypto devaluation which took place across 2022. With the crypto market falling sharply from highs over that period, retail trading volumes shrank massively as traders covered losing positions and withdrew remaining deposits. With the crypto market largely lifeless over much of 2023 there was little impetus for a pickup in demand, reflected in the huge decline in advertising and online presence for crypto.

Coinbase Rally Gathering Steam

However, the pickup in prices over late 2023 and 2024 so far has reignited mainstream demand for crypto with advertising and news attention reflecting the increase.  With prices taking off again, retail demand has rejoined the market in large volume along with a steady uptick in bigger players, so called ‘whales’ establishing positions. This demand has seen Coinbase deposits and trading volumes soaring, driving the company’s stock price higher, leading to a run of 5 consecutive quarters of earnings growth on the back of the losing streak seen over 2022.

Bullish Outlook

Looking ahead, with crypto expected to continue to gain over 2024, helped by the bitcoin halving event and expected Fed easing, Coinbase shares look likely to continue higher. The key event to watch near-term will be the Bitcoin halving event in April. Provided we don’t see a post-event crash, the near-term outlook remains strong.

Technical Views

Coinbase

The rally in Coinbase shares has seen the market breaking back above the December 2023 highs with price now probing above the 205.14 level. Bearish divergence in momentum studies suggests risks of a pullback near-term. However, while above the 154.35 level, the medium term view is in favour of a test of 248.06.