How Coinbase Stock Looks Like Bitcoin, Ethereum Rises Higher

by James · August 8, 2022

On Sunday night, Benzinga asked his followers on Twitter which stock they are zeroing in on this week. From the responses, Benzinga selected one ticker for technical analysis.

Fitness @fitghi15 replied to say they are focusing on Coinbase Global Inc COIN.

Coinbase rose over 8% in premarket trading on Monday as Bitcoin BTC/USD and Ethereum (CRYPTO: ETH, which rose around 4% and 7%, respectively. Bitcoin’s peak saw the crypto break out of a falling channel pattern, which Benzinga pointed out was likely to happen on Friday.

The crypto trading platform has also been strengthened recently by Robinhood Markets, Inc HOOD, which reported strong growth in revenue from crypto transactions when the latter reported its quarterly results. Traders and investors will be watching closely to see if Coinbase has seen the same increase in revenue when the company releases its third-quarter financial results on Tuesday.

For the quarter, analysts forecast that Coinbase will post a loss of $2.68 per share on revenue of $830.52 million.

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The coin base chart: Coinbase reversed course into an uptrend on June 30 and has since made a consistent series of higher highs and higher lows. The stock’s last high low was formed on July 26 at $52.63, and the last confirmed higher low was printed at $79 on July 20.

Coinbase has soared nearly 40% higher since the market closed on Tuesday, extending the stock to the upside. Coinbase’s Relative Strength Index (RSI) measures around 70%, and when a stock’s RSI reaches or exceeds that level it is overbought, which can be a sell signal for technical traders.

On Friday, Coinbase almost printed an inside bar pattern, falling just below Thursday’s mother bar series. On Monday, traders can look for Coinbase to start trading with a second inside bar and then look for a break up or down from Thursday’s mother bar to take place later on Monday or over the next few days with higher than average volume.

If Coinbase continues to run higher into earnings pressure, there’s a chance the stock could sell off after the results, regardless of whether the company hits or misses. Bullish traders prefer to see the stock trade sideways or slightly lower heading into Tuesday, which will also help cool Coinbase’s RSI.