Coinbase Pumps Higher Following Bitcoin, Ethereum: The Bull, Bear Case

Coinbase Global Inc COIN was rising about 5% on Thursday boosted by a statement from the U.S. Securities and Exchange Commission Chair Gary Gensler.

During testimony on Wednesday, Gensler maintained his position that Bitcoin doesn’t meet the requirements to be considered a security.

Bitcoin and Ethereum reacted positively to Gensler's bearish stance, spiking about 2% and 3%, respectively, before beginning to consolidate sideways.

On Thursday, Coinbase opened slightly higher before starting to spike considerably north, regaining the eight-day exponential moving average (EMA), which could negate the possible bear flag.

The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock higher between a channel with parallel lines or into a tightening triangle pattern.

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The Coinbase Chart: Coinbase was forming a possible bear flag pattern on the daily chart, with the downward sloping pole created between Sept. 18 and Sept. 25 and the flag printing since then. On Thursday, Coinbase was attempting to negate the flag pattern by breaking up from it and if the stock closes the session above $74, the formation will be void.

• Although Coinbase negated its uptrend when it slid 16% to form the pole of the bear flag pattern, the stock hasn’t yet confirmed a new downtrend with the formation of a lower high. Bearish traders want to see the stock eventually form a bearish reversal candlestick, such as a doji or shooting star candlestick, under $84.35, which could indicate a new downtrend is on the horizon.
• Bullish traders want to see Coinbase continue to rise higher on increasing volume and then for the next retracement to hold above $69.63. If the stock retraces to print a higher low, it will confirm a new uptrend.
• Coinbase has resistance above at $83.82 and at $102/59 and support below at $69.82 and at $60.99.

Read Next: Coinbase CEO Brian Armstrong Calls For UK Officials Response To JPMorgan Chase's Anti-Crypto Stance

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