Bitcoin breaks $90K barrier: Coinbase’s next move? (11/13/2024)

Hello, everyone! This week, we’re turning our attention to Coinbase Global, Inc. $Coinbase (COIN.US)$ , a leading crypto exchange platform in the United States. Something exciting has happened: Bitcoin’s value has jumped by about 30% since the U.S. presidential election on November 5th. This surge has pushed Coinbase’s stock to its highest level in three years. In this article, we’ll explore the latest trends and examine the company’s recent market activity.

What’s new?

On Tuesday, November 12, 2024, Bitcoin reached a historic milestone, surpassing $90,000 for the first time as the post-election rally continues to gain momentum. So far this year, Bitcoin has more than doubled in value, outperforming traditional investments like stocks and gold.

Investors are increasingly optimistic about cryptocurrencies, largely due to former President Donald Trump’s return to office. Trump has signaled a more favorable regulatory environment for digital assets, promising to transform the U.S. into the crypto capital of the world. A key part of this strategy involves replacing Securities and Exchange Commission (SEC) Chair Gary Gensler, who has been known for his stringent approach to crypto regulation.

The ripple effect of Bitcoin’s record-breaking surge has boosted crypto-related stocks across the board. Coinbase, the leading U.S. crypto exchange, has seen its shares skyrocket by over 70% since Election Day. This dramatic increase is likely due to expectations of rising crypto prices and increased trading activity, both of which could significantly benefit the company’s bottom line.

Some financial analysts believe Bitcoin enthusiasts are anticipating a more favorable regulatory environment and the potential establishment of government-backed crypto reserves, which could sustain high demand. However, skeptics caution that despite claims of Bitcoin serving as a hedge against dollar fluctuations, recent trends suggest it exhibits procyclical behavior, moving in tandem with broader market sentiment.

Chart of the day

Trend analysis:

Coinbase’s stock $Coinbase (COIN.US)$ has exhibited remarkable volatility this year. The daily chart reveals a series of distinct market phases: an initial uptrend, followed by a period of sideways movement, then a pronounced downtrend, and currently, a resurgent uptrend.

The latest bullish phase, which commenced in September, has been particularly noteworthy, with the share price more than doubling in a mere two-month span. Such dramatic price action underscores the dynamic and often unpredictable nature of crypto-related stocks.

Technical indicators:

● COIN is currently trading significantly above its key moving averages (MAs), including the 50-day MA and 200-day MA, reflecting a robust bullish sentiment in the market. This surge occurs amidst a backdrop of heightened market volatility, primarily catalyzed by the implications of Trump’s electoral victory.

● The RSI indicator has retreated below the critical 70-point threshold after surpassing the overbought level for three consecutive trading sessions, potentially signaling a bearish reversal in the short term.

● A bearish engulfing pattern has emerged, characterized by a smaller bullish candle followed by a larger bearish candle that completely engulfs the body of its predecessor. This formation serves as a warning signal, indicating a potential price reversal to the downside.

● A critical support level to watch might potentially be established around $273, where the stock breached a four-month resistance, accompanied by a substantial upward gap.

In summary, Coinbase (COIN), as a prominent crypto exchange, exhibits pronounced volatility in its stock performance. Its short-term price dynamics closely track the crypto market, especially Bitcoin’s often speculative fluctuations. COIN has been experiencing a robust uptrend, which has intensified in recent days. Nevertheless, in light of the swift price appreciation, market participants could anticipate a potential price correction or consolidation phase in the near term.

This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve.

All investment involves risk, including the potential loss of principal, and there can be no guarantee that any investment strategy will be successful.