Coinbase Global, Inc (NASDAQ:COIN) soared over 50% between Oct. 13 and Nov. 9 where the massive run topped out at $368.90. The pullback on Nov. 10 was due to a bearish reaction to the cryptocurrency trading platform’s mixed third-quarter earnings print.
On Tuesday in the premarket, Coinbase was trading down 3% in sympathy with Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), which fell over 7% and 9%, respectively in the early morning hours before bouncing slightly higher at 5:45 a.m. EST.
Traders and investors may be worried a consolidation period in the cryptocurrency sector, or a bear cycle during the remainder of the fourth quarter, could be grim for Coinbase. The company stated in its third-quarter results the softer crypto market during the period caused global crypto spot trading volumes declined 37%, which contributed to lower revenue for Coinbase.
See Also: How to Buy Coinbase Stock Right Now
The Coinbase Chart: Although Coinbase gapped down over 8% following its earnings print bulls came in and bought the dip and closed the gap intraday. During the three trading days that have followed, Coinbase has risen over 8% higher but on Monday closed flat on the down and down 2.77% from its high-of-day price, amid overall shaky markets.
The flat close cause Coinbase to print a long-legged doji candlestick on the daily chart, which indicates the top may be in and the stock will trade lower over the coming days. If Tuesday’s candle confirms the long-legged doji candlestick was the temporary top, the candle will mark a lower-high, which could indicate a downtrend will begin. Coinbase will need to fall below the Nov. 10 low of $320 in order to confirm the new trend.
There is a gap below on the Coinbase chart left behind on Oct. 15 that falls between $362.95 and $266.53. Gaps on charts fill about 90% of the time so it’s likely Coinbase will trade down into the range in the future.
On Monday, Coinbase was trading above the eight-day and 21-day exponential moving averages (EMA), which is bullish but if Coinbase falls below the indicators on Tuesday, bullish traders will want to see the stock regain the eight-day EMA as support in short order. The stock is trading well above the 50-day simple moving average, which indicates longer-term sentiment remains bullish.
- Bulls want to see Coinbase hold above the $320 area and for big bullish volume to come in and push the stock up over Monday’s high-of-day price to negate a possible downtrend. Coinbase has resistance above at $345.99 and $368.90.
- Bears want to see Coinbase print a lower-low on big bearish volume, which will cause the stock to lose support of the 21-day EMA. Coinbase has support below at $320, $317.37 and $303.90.
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