Key Insights:
- Coinbase’s stock price has formed a cup-and-handle pattern.
- COIN also formed a golden cross and an inverse H&S pattern.
- These patterns point to an eventual Coinbase share price surge to $550
Coinbase stock price was in a strong rally as Bitcoin and most cryptocurrencies surged. It soared to $373, continuing a prolonged bull run that started in April when it bottomed at $145.
COIN stock has formed the highly bullish cup-and-handle pattern, signaling an eventual surge to $550 during this crypto bull run. It has also formed an inverse head-and-shoulders and a golden cross pattern.
Coinbase Stock Cup and Handle Pattern Hints at a Major Rally
The daily timeframe chart indicates an impending bull run in the Coinbase share price. First, it formed a golden cross pattern in May. This happened as the 50-day moving average crossed and exceeded the 200-day moving average.
Historically, a golden cross is one of the most closely watched bullish confirmation patterns. Second, Coinbase stock price has formed a giant cup-and-handle pattern, which may trigger more gains. The C&H pattern has two parts: a rounded bottom and some consolidation at the top.
The distance between the cup’s upper and lower sides is about 58%. Measuring the same distance from the upper side points to an eventual surge to $550, 47% above the current level.
Further, the stock has formed an inverse head-and-shoulders pattern. In this case, the head is at its May low of $145. On the other hand, the shoulders are around the $238 level, and the neckline is at $348.
Moreover, the Coinbase share price rally is supported by the Supertrend indicator. This has been green since April 24. The Relative Strength Index (RSI) has continued rising this year. These patterns and indicators suggest that the stock will continue to soar.
Crypto Bull Run to Support the COIN Rally
The ongoing Bitcoin and altcoins surge is the main bullish catalyst for the Coinbase stock rally. Bitcoin price roared above $112,000 for the first time, triggering a broader crypto market bull run.
Fortunately, there are signs that this crypto rally will continue. As the chart below shows, Bitcoin has formed a cup-and-handle and a bullish flag pattern. This implies an eventual surge to $145,000.
Historically, Coinbase share price jumps when the crypto market is in a strong rally. That’s because this situation leads to more retail and institutional investors.
For example, COIN surged during the COVID pandemic, and Bitcoin and most coins surged. It then crumbled in 2022 as crypto prices fell amid the Terra and FTX collapses.
Coinbase stock also benefits from the ongoing growth of its custody services as Ethereum and Bitcoin ETF inflows surge. Bitcoin ETFs crossed the $50 billion inflow milestone, bringing the total assets to over $138 billion.
Similarly, spot Ethereum ETF inflows jumped to over $4.7 Billion, bringing their combined assets to $11.8 Billion. This performance is essential because Coinbase is the biggest custodian in the crypto industry.
The next important catalyst for the Coinbase stock will be its earnings, providing more information on its performance. Analysts expect its revenue to be $1.6 Billion, up 14.45% from last year’s second quarter. Historically, Coinbase has a long track record of beating analysts’ estimates.
Coinbase stock has done well this year as the Bitcoin bull run has continued. This trend may continue as long as Bitcoin and other altcoins continue their bullish momentum.
This growth will help to allay the lingering fears of its valuation, which some analysts have expressed. Coinbase has a trailing price-to-earnings ratio of 70 and a forward multiple 64. It also trades at an enterprise value to EBTDA multiple of 48.
All these metrics are much higher than those of the broader market. Still, historically, the stock’s performance has been strong as long as the crypto bull run continues. This may happen now that Bitcoin demand is soaring while the supply is in a downward trajectory.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
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