COIN analysis – Are there any good entry opportunities?
4 min readIn the course of the correction on the crypto market, caused by new SEC allegations against the crypto exchanges Binance and Coinbase, the prices of Binance Coin (BNB) and Coinbase securities also came under significant pressure. The Coinbase stocks, for its part the only listed crypto exchange, has had to lose a lot of feathers in the past few days and weeks after the price has tripled since the beginning of the year. Since its brilliant debut on the US stock exchange Nasdaq in May 2021, COIN has lost around 92 percent in value at its peak. COIN hit its all-time low on January 6, 2023 at $31.55. The course correction thus shows great parallels to the development of the crypto market. Starting from this level, the share value tripled to an annual high of 87.92 US dollars.
The most recent lawsuit by the SEC against Coinbase at the start of the week has meanwhile caused the share to plummet by 26 percent. Renewed acquisitions by ARK-Investment CEO Cathie Woods in the amount of 22 million US dollars stabilized the COIN course at a current value of around 52 US dollars. With over 11 million shares in the company, Cathie Woods is the second largest Coinbase shareholder after investment giant Vanguard. Bitcoin fan Woods swears by the company’s chances of success and sees Coinbase’s chances in the US crypto market additionally strengthened by a possible discontinuation of the services of competitor BinanceUS. At the current price, the crypto company has a market capitalization of 12 billion US dollars and with a price/book ratio (PBV) of 2.2, it could be of particular interest to long-term investors who are interested in the opportunities offered by Bitcoin, Ethereum and Co. are convinced.
Coinbase: Bullish price targets for the next 12 months
Bullish price targets: $52.76, $58.67, $66.16, $70.79, $81.48/$85.09, $87.92, $106.72/$116.64 USD, $158.68, $209.69
This week, COIN price slipped below the key support composed of horizontal support and the 50-day and 200-day moving average (MA200) (blue) around $58.67 area. Only at the golden pocket of the current corrective movement at USD 46.77 did an intra-reversal back above the supertrend in the daily chart at USD 51.17 occur. What remains is an open price gap, which would only be closed if the price recovered to around 58.67 US dollars.
If the buyer side succeeds in stabilizing the Coinbase share at the current level and, in particular, in averting a relapse below the turquoise support area, the 50 Fibonacci retracement at USD 52.76 must first be recaptured in the long term. Then, the bulls may want to target the purple make-or-brake area. Only a dynamic breakout above this zone would pave the way towards the monthly high at USD 66.16. This is likely to be significantly influenced by the price development of the key crypto currency Bitcoin.
If Bitcoin can continue to stabilize in the coming weeks and rise back towards USD 30,000, Coinbase can also plan a recovery back above the Golden Pocket at USD 70.79 to the annual highs in the red resistance zone. However, only a sustained breakout above the high for the year at 87.92 US dollars would result in further price potential up to the blue resist area between 106.72 US dollars and release US$116.64. This is where Coinbase stock last failed in August 2022.
If the Bitcoin price increases towards a new annual high by the end of the year, it would also be conceivable in the long term for the COIN price to march back to the demolition edge from April of the previous year at USD 158.68. If the price subsequently jumps back into the orange chart area, a recovery towards USD 209.69 cannot be ruled out in the Bitcoin Halving year 2024. A friendlier crypto policy in the USA and a significant increase in sales and profits at Coinbase in the coming quarters would be beneficial for this bullish price scenario. In particular, the expansion of international business could be a step in the right direction for Coinbase. Most recently, synergy effects and ongoing job cuts had brought the company back into the profit zone after repeated weak quarterly figures in the previous year.
Coinbase: Bearish price targets for the next 12 months
Bearish price targets: $51.55, $46.77/$45.27, $41.07 $38.52, $35.27, $31.56, $23.98, $16.85
Coinbase started this trading week weak. As mentioned, new risks surrounding the SEC lawsuit weighed on the young technology company. If the correction in the crypto market continues and more negative news on the US crypto market follows, the COIN price could dip below the supertrend at $51.55 again and correct back towards its monthly lows. If the support zone between 46.77 US dollars and 45.27 US dollars does not hold, a correction extension to the lower edge of the turquoise support area at 41.07 US dollars is to be planned.
If the bulls fail to defend this area, the downside is likely to extend to the breakout level from the start of the year at $38.52. Should Bitcoin also continue to fall and fall below the psychological mark of US$ 20,000 for a long time, the Coinbase share price will fall again into the green support zone to take into account the low for the year. However, between US$ 35.27 and US$ 31.56, the buyer side around Cathie Woods should be there again.
Only if there is a new 52-week low for Bitcoin and at the same time declining sales on the Coinbase trading platform, or if Coinbase is forced to pay fines in the billions through an SEC lawsuit, will the Coinbase share not fall back to a new all-time low be excluded. Possible targets, derived from Fibonacci projections, would be $23.98 and $16.85.
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