Why Coinbase Could Flush To New All-Time Low: A Technical Look

Coinbase Global, Inc COIN was trading flat in the premarket after another bearish day on Monday, where the stock closed down 2.78% at $161.14, a fraction higher than the all-time low of $155.92.

The cryptocurrency trading platform is affected by the general market and the crypto sector, both of which have been struggling amid the Russian invasion of Ukraine. Investors are also eyeing the upcoming Federal Reserve meeting (March 16-17), where Fed chair Jerome Powell is expected to announce the central bank will raise interest rates to combat soaring inflation.

Coinbase has declined 37% so far this year and on Monday, Goldman Sachs maintained its Buy rating on the stock but lowered its price target to $250. The new price target represents a 56% increase from the current share price but comes in shy of where Coinbase opened trading on Jan. 3, 2022, at $257.27.

Coinbase stock is known to make large intraday moves, soaring or declining over 15% in a single day. As the stock nears its all-time low, Coinbase could become volatile as the bulls and bears fight for control.

See Also: Why Coinbase Is Against Banning All Russians From Crypto Exchange

The Coinbase Chart: Coinbase has been trading sideways between $155 and $218 since Jan. 21, when the stock gapped down almost 5%. The horizontal trading pattern indicates that either accumulation or distribution is taking place and when the security breaks up or down from the pattern on higher-than-average volume, a large move is likely to follow.

Coinbase’s relative strength index (RSI) is measuring in at about 35%, which indicates at least a bounce may be on the horizon. When a stock’s RSI nears or reaches the 30% level, it becomes oversold, which can be a buy signal for technical traders. When the stock’s RSI dropped to the 35% level on Feb. 23, Coinbase rallied about 30% over the four trading days that followed.

Coinbase has a gap above between $217.49 and $220.84 that is likely to be filled in the future because gaps on charts fill about 90% of the time.

Coinbase is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading well below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see Coinbase hold above and bounce up from the all-time low, which could cause the stock to print a bullish double bottom pattern at that level. Coinbase has resistance above at $162.20 and $177.45.
• Bears want to see Coinbase flush to a new all-time low, which could cause significant downside because below the level, there is no further support in the form of price history.
  
• See Also: Coinbase Says This Is Why Crypto Is No Good For Sanctions Evasion

Photo: Courtesy of Marco Verch Professional on Flickr