Coinbase Slips To New All-Time Low While Bitcoin, Ethereum Hold Steady: What's Next?

Coinbase Global, Inc COIN reached a new all-time low on Monday as fear in the crypto sector continues to plague related stocks following Sam Bankman-Fried's FTX disaster. 

Bulls were fighting intraday to hold Coinbase above a psychologically important $40 mark but lower-than-average volume was causing the stock to consolidate mostly sideways on smaller timeframes. Coinbase was also holding above the area because Bitcoin BTC/USD and Ethereum ETH/USD were trading mostly sideways. 

Cathie Wood’s-led Ark Investment Management bought the dip on Friday, adding 78,982 shares of the cryptocurrency exchange to its holdings for a total position of about 5.7 million shares.

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Wood, a staunch Bitcoin bull, has predicted the apex cryptocurrency will reach a $1 million valuation by 2030 but has also given $400, 000 and $500, 000 price targets in the past. 

The bottom may not be in for Coinbase because the stock started trading in a downtrend on Dec. 6 after breaking bearishly from an ascending channel pattern, which Benzinga called out on Dec. 6. If the $40 area holds, however, and the market reacts bullishly to consumer price index data on Tuesday, Coinbase may receive a boost due to a double bottom pattern that has formed. 

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The Coinbase Chart: Coinbase may have printed a double bottom pattern at $40 on Monday and Friday, by holding near the level. If Coinbase bounces on Tuesday, the stock will need to trade up above $44.15 in order to negate the current downtrend. 

• If Coinbase falls under $39.65 on Tuesday, Monday’s high-of-day will become the next lower high within the stock’s downtrend. Technically speaking, Coinbase looks neutral because although the stock is in a downtrend, Coinbase was working to print a possible inverted hammer candlestick on Monday, which could indicate a spike higher is on the horizon. 
• Coinbase has also developed bullish divergence on the daily chart, which suggests higher prices may be in the cards. Bullish divergence occurs when a stock makes a series of lower lows but its relative strength index makes a series of higher lows. 
• Coinbase has resistance above at $44.15 and $50.34 and support below at $40 and lower psychologically important areas of $35 and $30. 

Read Next: Coinbase Gets Re-rated As Analyst Weighs Scalable Model Balanced By Limited Revenue Visibility