It isn’t often you get a a falling wedge like the one Coinbase (COIN) has put in recently and it’s even less often that you get price breaking out of a downward spiral like the one COIN has been in. As you can see by the chart, after hitting a price of 114.43, the stock has experienced a precipitous decline to 72, where it then reversed course.
Price has finally broken out of this declining wedge in a bullish way, along with what seems like a reversal by the market. If the market can keep this momentum going, COIN should also see higher prices with the next major resistance level coming at 85. If we can get to that level and break through, coupled with market strength, we may even be able to test recent highs once again.
However, when it comes to a crypto stock like COIN, you have to also take into account the macro environment of the crypto market as well, which took a hit when it came out that SpaceX sold its holdings of crypto, sending the price of many of the crypto leaders spiraling downward.
This decline may have only been due to the initial shock of this news, but it is still something investors and traders should be mindful of. Look for strength in both the stock market, as well as the crypto market in order to see if this trade is valid. If those markets can gain strength, look for a bounce in COIN.
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