Is Coinbase stock at risk ahead of Schwab crypto trading launch?

Coinbase stock wavered today, Dec. 4, as the recent recovery waned and as concerns about competition in the U.S. rose.

Summary

• Coinbase stock price could be at risk as competition in the United States rise.
• Charles Schwab plans to launch its crypto trading services in January next year.
• Technical analysis suggests that the COIN stock price will reverse and hit the support at $200.

COIN was trading at $186, down by 1.3% from its closing price on Wednesday. It remains down by ~40% below its highest level in July this year.

A key risk for Coinbase is that more American companies are starting to launch crypto trading services, a move that will make it more competitive.

SoFi, a company with over 12 million customers, recently relaunched its crypto services, a move that allows its customers to consolidate their trading in one platform. 

And this week, Charles Schwab, a company with over 38 million active brokerage accounts and nearly $12 trillion in assets, will also start offering these services in January. It will initially start with Bitcoin (BTC) and Ethereum (ETH) and then expand to other coins over time.

Additionally, other crypto companies like OKX and Binance are working to relaunch their services in the US, where the industry is seeing encouraging regulatory progress in Donald Trump’s administration.

All this is happening as analysts expect Coinbase’s growth will slow down. The average estimate among analysts is that its fourth quarter revenue will come in at $1.96 billion  down by 13.5% from what it made last year. It is expected to make $2.03 billion in the first quarter, down by 0.31% from the same period last year.

Most importantly, analysts expect that Coinbase’s earnings per share will drop to $8.08 this year from $9.49 in 2024, followed by $6.85 in 2026. Its profits may get worse if it is forced to cut its fees to deal with the rising competition.

Coinbase stock price technical analysis 

The daily timeframe chart shows that the COIN stock price has pulled back from the October high of $400 to the current $277.

Coinbase stock remains below 50% Fibonacci Retracement level. It has also dropped below the important support level at $290, its lowest swing in August and September this year.

It is also about to form a death cross pattern as the spread between the 50 and 200-day Exponential Moving Averages narrows. A death cross is a common bearish reversal sign.

There are signs that the stock wants to retest the key resistance level at $290, which will confirm a break-and-retest pattern, a common continuation sign. If this happens, there is a risk that the COIN stock price will drop to $200.