I noticed an interesting movement in the market — Coinbase shares rose 17% on Friday, coinciding with a recovery across the entire crypto sector. Bitcoin then climbed to $68,000, and the total market capitalization of cryptocurrencies exceeded $3.3 trillion. It’s clear that Coinbase’s stock price reacts well to such movements because higher trading volumes mean more commissions for the exchange.

There were several reasons for the growth. First, a US inflation report was released, which turned out to be better than expected — consumer inflation slowed to 2.4%, the lowest level in several months. This hinted that the Federal Reserve might cut rates more than the market anticipated. Second, the company published its financial results, and although they weren’t very strong, analysts remained optimistic. UBS set a target price of $265, Deutsche Bank at $250 — both see growth potential from the current level.

Analysts note that Coinbase is well diversified. Besides traditional spot trading, the company is developing stablecoins, ( income grew to $364 million from $225 million a year earlier), launched prediction markets, and is working with tokenized assets. But here’s the problem — main revenue still comes from trading commissions, which are projected to be $4 billion in 2025, while subscriptions brought in only $2.82 billion. When crypto declines, it puts pressure on the entire business.

From a technical perspective, the situation looks concerning. Coinbase’s stock price rebounded from the $140 level, which coincides with the September 2024 low. But the stock remains below all moving averages and the Supertrend indicator. The chart shows signs of a bearish flag — this could indicate a resumption of the decline. If the price breaks below $140, the next support is around $100. So, this rebound might be temporary as long as crypto continues to grow.