MicroStrategy, Coinbase, Riot Technical Analysis Ahead of Earnings Release as Bitcoin Nears All-Time High

In Q2 2024, MicroStrategy (MSTR) demonstrated strong financial performance. This was particularly evident in its Bitcoin holdings and subscription services. The company holds 226,500 Bitcoin, acquired at a total cost of $8.34 billion. Its current market value is approximately $15 billion, solidifying MicroStrategy’s position as the largest corporate holder of Bitcoin. Additionally, capital market activities strengthened liquidity, with $800 million raised through convertible notes and a $2 billion ATM equity program. On the software side, MicroStrategy reported $24.1 million in subscription services revenue, marking a 21% year-over-year increase. Partnerships and first-to-market AI integrations highlight the company’s advancements in AI and cloud services. These developments underscore its commitment to growth in the technology sector.

On the other hand, Coinbase (COIN) focused on regulatory progress and advocacy for the crypto industry. The company highlighted the growth of crypto supporters, with over 1.3 million advocates globally. Coinbase saw positive shifts in U.S. regulatory attitudes, including a favorable Supreme Court ruling. The SEC closed multiple investigations into the industry and approved Ethereum ETFs. Coinbase also invested $25 million to support pro-crypto candidates. This focus on regulatory clarity signals Coinbase’s commitment to advancing crypto innovation and strengthening its position in the industry.

Similarly, Riot Platforms Inc. (RIOT) reported a total revenue of $70 million in Q2 2024, down from $76.7 million in Q2 2023. The company mined 844 Bitcoins, a 52% decrease from the previous year due to the Bitcoin “halving” event and increased network difficulty. Bitcoin mining revenue rose to $55.8 million, supported by higher Bitcoin prices. Engineering revenue fell to $9.6 million. Riot’s direct mining cost increased significantly to $25,327 per Bitcoin. Despite challenges, Riot maintained a solid financial position, holding 9,334 Bitcoin, worth $585 million, and $481.2 million in cash.

Earnings Expectations

MicroStrategy expects a normalized EPS of -$0.02 and a GAAP EPS of -$0.12, with estimated revenue at $121.45 million in Q3 2024. On the other hand, Coinbase expects a normalized EPS of $0.42, a GAAP EPS of $0.38, and revenue of $1.25 billion. Similarly, Riot expects a normalized EPS of $0.02, a GAAP EPS of -$0.21, and revenue of $93.22 million. The release of these earnings will increase the volatility in these stocks.

The chart below shows the percentage change in price since April 2021. It reveals that MicroStrategy’s stock price surged above a 250% gain, while Riot and Coinbase have not shown similar momentum. Revenue and net income are highest for Coinbase, though Riot has seen a significant shift in profitability over the past few years. Therefore, the release of earnings may have a more substantial impact on MicroStrategy as the stock is experiencing intense volatility.

MicroStrategy Technical Analysis

MicroStrategy Weekly Chart – Ascending Channel

The weekly chart for MicroStrategy shows the price moving within an ascending channel. The target for this channel is $370. The price is positioned to move higher ahead of the earnings announcement. This ascending channel is formed after a breakout from the black-dotted trendline. Although the RSI is in the overbought region, the price remains poised to continue higher despite this condition.

MicroStrategy Daily Chart – Positive Price Action

The daily chart for MicroStrategy shows that the price has broken above $180, opening the door for higher levels. The RSI has entered the overbought region on the daily chart, suggesting that the price may experience a slight correction before the next move higher. The upcoming earnings release could ignite volatility, potentially triggering this correction followed by a strong rally.

Coinbase Technical Analysis

Coinbase Weekly Chart – Inverted Head and Shoulders

The weekly chart for Coinbase shows the formation of an inverted head-and-shoulders pattern in 2022 and 2023. This pattern was broken, leading to a price rally. After the breakout, the price encountered resistance around the $270 area and began consolidating. This consolidation has formed a descending broadening wedge pattern. A break above $250 would break this pattern and could initiate a strong move higher. The RSI is rising from the mid-level, indicating upward momentum in the stock price.

Coinbase Daily Chart – Descending Broadening Wedge

The descending broadening wedge pattern is also visible on the daily chart. The price has been consolidating within this pattern for the past six months, and a breakout above it is likely soon. A break above $255 could lead to a strong move higher.

Riot Technical Analysis

Riot Weekly Chart – Turning from Long-Term Support

The stock price of Riot is trading at a long-term support area, where a bottom is likely to develop. Once the bottom forms, the stock price could surge higher. The weekly chart for Riot shows that the stock is consolidating at the bottom level and displaying positive momentum. This positive momentum is indicated by the RSI remaining above the mid-level, and the price consolidation suggests strength. A break above $13 would confirm a bottom and initiate the next surge higher.

Riot Daily Chart – Cup Formation

The daily chart for Riot also shows positive price development in the form of a cup pattern. The immediate resistance is at $13, and a break above this level could target $18. Since the RSI has reached the overbought region, the price may correct lower before the next move. However, the upcoming earnings release could induce some volatility and result in significant moves.

Final Thoughts

In conclusion, MicroStrategy, Coinbase, and Riot exhibit favorable technical setups ahead of their upcoming earnings releases. MicroStrategy shows strength within an ascending channel, with potential for higher targets despite its overbought RSI. Coinbase is consolidating within a broadening wedge pattern, indicating upward momentum if it breaks above resistance levels. Riot, trading near long-term support, displays positive momentum, suggesting a possible bottom formation and subsequent rally. The earnings announcements for these companies could introduce volatility, potentially reinforcing the bullish patterns observed in their charts. Investors may find opportunities to enter these stocks on pullbacks, aiming to capitalize on further gains.