Crypto space may be more sensitive to odds of Trump’s presidency
Traction in the cryptocurrencies space may now be also tied to the odds of a Trump presidency, with the Republican nominee recently announcing plans to establish a presidential advisory council on cryptocurrency, create a national “stockpile” of Bitcoin and make the US a ‘Bitcoin superpower’.
His stance points to potential easing in regulations for the cryptocurrency sector and an uplift in demand upon his successful election, which is well-received by the crypto community. With that, any higher odds of a Trump presidency could see further traction for the crypto space, which could be beneficial for Coinbase.
Forward guidance in focus, with expectations for growth momentum to continue through rest of 2024
Refinitiv estimates suggest that expectations are for Coinbase’s growth momentum to continue through the rest of 2024, which will leave any positive tone from management guidance on watch for validation.
Its subscription and services revenue is expected to remain resilient from higher stablecoin revenue and blockchain rewards revenue. Its institutional share remains in focus, with its earlier move to reduce fees aggressively for high-volume traders. 1Q 2024 witnessed a more than two-fold jump in its institutional revenue, but it could be tied to strong traction following the approval of Bitcoin ETFs. The degree of any taper-off ahead may offer greater clarity on the success of its fee-reduction plan.
Technical analysis – Coinbase’s share price trading on near-term higher lows
Since February this year, Coinbase’s share price has been trading within a broader ranging pattern, with base support at the US$193.60 level while upper resistance may be found at the US$272.90 level. Near-term, an ascending channel formation may seem to be in place, with a trendline connecting higher lows leaving immediate support at the US$224.68 level on watch.
Failure to defend this level may pave the way for a retest of the US$193.60 level. On the upside, Coinbase’s share price has rejected the US$272.90 on two occasions since June 2024, leaving it as a crucial level for buyers to overcome. For now, buyers seem to be largely holding on, with its daily moving average convergence/divergence (MACD) forming higher lows and share price trading above various moving averages (MAs).
