The Key Takeaways
- Coinbase stock is off to a great start in 2018. The cryptocurrency exchange has continued to profit from the optimism of a Trump presidency and a Congress that will be supportive of policies that are beneficial to this asset class.
- The stock price is roughly centered between the 50- and 200-day moving averages after the rally that followed the election.
- Watch for key levels of support on the Coinbase Chart around $220, $187 and also important levels of resistance near $283 and $352.
After a recent pullback, Coinbase shares (COIN), are having a good start to the year.
The stock price has risen by more than 30 percent since Donald Trump won the election in early November amid the optimism that his administration, along with a Republican Congress more crypto-friendly, will establish the United States’ position as the global leader of cryptocurrency, thereby creating a favorable regulatory climate for exchanges such as Coinbase.
In the future, it is expected that the company will also benefit from increased trading, since Bitcoin (BTCUSD), still just below $100K, has been performing well, while other altcoins of large cap, such as Ethereum, (ETHUSD), and Solana have done very well.
Coinbase’s shares rose 2% to $263 at the opening of trading on Friday after rising more than 3% in yesterday’s trade.
Here, we examine Coinbase’s chart in greater detail and employ technical analysis to pinpoint important price points.
Retracement Following 3-Year High
Coinbase’s shares reached a three-year-high in December shortly after crossing the moving averages (MAs) of 50 and 200 days to create a golden cross bullish signal. The stock, though, has since retraced roughly half of its rally following the election, as the price is currently positioned between the 200 and 50 day MAs.
The relative strength indicator (RSI), with a value of around 40 confirms a weak price movement. However, historically the stock tends to rebound when this level is reached. A recent drop in price has also been accompanied with lower-than-average volume, suggesting a lackluster selling sentiment.
We’ll identify key support and resistance levels that may have investors looking at the Coinbase chart in the early first quarter.
Keep an eye on the Key Support Levels
Around $220 is the first level of support to be watched, which sits just below 200-day MA. Investors should look at entry points near a line that connects multiple peaks & troughs between the months of March and October.
Inability of the bulls to defend the level may lead to the decline in shares to about $187. The prominent swing high from December 2023 is also close to a series of price points similar to those between February and November.
You should track important resistance levels
Investors should monitor $283 if the share price moves higher in the month ahead. This is a level on the chart that could be impacted by selling pressure, as it’s near the peak of March, the mid-November low retracement, and the 50-day MA.
A close decisively above this level may see the stock move towards $342. The traders who have purchased the shares in the recent drop may want to take advantage of this area near a consolidation range located below the December stock high.
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