Coinbase Pops Higher With Bitcoin, Ethereum Before Edging Lower: What's Happening?

Coinbase Global, Inc COIN popped up over 4% at one point on Tuesday after consumer price index data released by the U.S. Labor Department showed inflation ticked lower in January.

Inflation rose 6.4% last month compared to 6.5% in December, which caused Bitcoin BTC/USD and Ethereum ETH/USD to spike up over 2% and 4%, respectively, although the number came in above the 6.2% expected by economists.

The S&P 500 initially edged about 0.5% higher in reaction to the data before dropping under Monday’s closing price. By 10:30 a.m. the stock market and crypto sector had erased the pump higher, which pressured Coinbase down to near flat.

From a technical analysis standpoint, Coinbase rejected the 200-day simple moving average (SMA) when it moved higher, indicating the stock needs further consolidation under that level before making another attempt to regain the area.

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The Coinbase Chart: Coinbase also attempted to regain the 200-day SMA on Friday and failed. The 200-day SMA is an important bellwether indicator that acts as a major area of support and resistance, making it difficult for a stock to break through the area and remain above it on the first few attempts.

• Coinbase has been trading near to the 200-day since Jan. 27, briefly breaking above the area on Feb. 2 before dropping under the level on Feb. 9. When Coinbase fell under the 200-day SMA, the stock also confirmed a new downtrend was intact by printing a lower low.
• Coinbase’s most recent lower high was formed on Feb. 8 at $73.97 and the most recent confirmed lower low was printed on Monday at $53.66. If Coinbase trades lower on Wednesday, Tuesday’s high-of-day will serve as the next higher low within the pattern.
• If Coinbase closes the trading day under the $58 mark, the stock will print a shooting star candlestick, which could indicate lower prices will come again on Wednesday. If that happens, the stock may find support at the 50-day SMA, which is trending at about $48.
• Bullish traders want to see Coinbase chop sideways near to the 200-day SMA and then for big bullish volume to come in and break the stock up above the level. The 50-day SMA is curling up, which is a good sign for the bulls.
• Coinbase has resistance above at $60.99 and $83.32 and support below at $50.34 and $40.15.

Read Next: Coinbase CEO Brian Armstrong Advocates For Clearer Crypto Regulations In Washington D.C.

Photo courtesy of Coinbase.