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Friday, February 3, 2023

Flash: Coinbase Has Yet to Make a New Low Monday

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Coinbase Global (COIN) is a cryptocurrency company that provides customers with a platform for buying, selling, transferring, and storing digital assets. Cryptocurrencies have been plunging and COIN probably had many reasons to make a new low on Monday but did not!

 

When a stock is hit with a barrage of bearish news and it does not make a new low in price it is a sign that the bearish news has been largely discounted. Let’s check out the latest charts.

 

In this daily Japanese candlestick chart of COIN, below, we can see a crushing decline from November to early May. In May we can see that prices were quickly cut in half and trading volume surged dramatically. Prices rebounded slightly and have declined back towards the May nadir but they have not made a new low despite the reports of carnage in the crypto market.

 

We could make a new low at any time but for right now we have a “teachable” moment.

 

The daily On-Balance-Volume (OBV) line has not made a new low for the move down and the slow-stochastic indicator (an oversold/overbought indicator) is likely to make a higher low in the days ahead.

 

 

In this weekly Japanese candlestick chart of COIN, below, we can see a large lower shadow and very heavy trading volume to make a low in early May. The weekly OBV line is at a new low but the MACD oscillator is narrowing. 

 

 

 

In this daily Point and Figure chart of COIN, below, we can see that prices reached a downside price target in the $58 area.

 

 

In this weekly Point and Figure chart of COIN, below, we can see that price met a downside target of $45.

 

Bottom line strategy: I find it interesting that COIN has been able to hold above its May 12 low. This does not make COIN a buy but it is a teachable moment.

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