Coinbase Plunges to New Low as Bitcoin, Ethereum, S&P 500 Take a Hit: What’s Next? – Coinbase Global (NASDAQ:COIN)
Coinbase Global, Inc COIN hit another new all-time low on Thursday, falling over 6% to $37.44, Benzinga pointed out on Monday.
The movement lower came in step with Bitcoin BTC/USD, Ethereum ETH/USD and the S&P 500, all of which fell significantly by between 2% and 3%.
Benzinga’s Business School instructor Mark Putrino called out Coinbase’s likely fall on Nov. 21, when the stock fell below $44.15.
Coinbase has been adversely affected by falling sentiment in the crypto sector, driven down most recently in the wake of FTX bankruptcy and founder Sam Bankman-Friedhis subsequent arrest.
Not everyone is bearish on Coinbase. Cathie Wood-led Ark Investment Management bought the dip on Dec. 9, adding 78,982 shares of the cryptocurrency exchange to its holdings for a total position of about 5.7 million shares.
Wood, a staunch Bitcoin bull, has predicted the cryptocurrency’s peak will reach $1 million
by 2030, but has also given $400,000 and $500,000 price targets in the past.
Whether Wood calls the Coinbase bottom with his purchases or whether the stock has to fall further before it reverses remains to be seen, but so far Coinbase is showing few signs that anything more than a bounce is on the horizon.
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The coin base chart: Coinbase has been trading in a consistent downtrend since November 3, when the stock broke bearishly from a sideways channel and formed a lower low. The last downtrend low was printed on December 14 at $46.01 and the last confirmed lower low was formed at $38.50 on Tuesday.
- Despite the consistently lower prices, Coinbase is likely to bounce soon as the stock has developed bullish divergence on the daily chart. Bullish divergence occurs when a stock makes a series of lower lows, but its relative strength index makes a series of higher lows.
- For the divergence to correct, Coinbase will either have to trend slightly higher or plunge sharply to drop the RSI near oversold territory. If the latter occurs, a bigger bounce could be in the cards, but at a later date.
- Coinbase has resistance above at $40 and $44.15 and psychological support below at $35 and $30.
Read next: Coinbase gets re-rated as analyst weighs scalable model balanced by limited revenue visibility
Image courtesy of Coinbase.
