Key Takeaways
- Coinbase shares fell for a fourth consecutive session on Monday. This concluded a volatile month during which the stock lost a fifth of its value.
- The shares of the crypto exchange have been retreated in a descending widening formation. The 50-day moving is poised to cross under the 200-day MA, forming an ominous death-cross, a chart pattern which signals lower prices.
- Investors should monitor key resistance levels near $206 as well as $264. They also need to watch out for major support levels around $146 and $115.
Coinbase shares (COIN), which have lost one-fifth their value in the past month, fell for a 4th consecutive session on Monday.
The shares of the biggest crypto brokerage in America have fallen sharply from a high reached three years ago. The drop in share price is closely correlated with a steep decline in trading volumes since then, amid a significant retracement of bitcoin’s value. This has led to concerns that lower transaction costs could affect the company’s revenues.
Coinbase shares have lost half their value since December’s peak. They are part of a broader sell-off that has affected leading cryptocurrencies, technology stocks and other financial instruments. The selling is due to fears about tariffs slowing economic growth and rekindling inflation. The stock dropped 1% to close the session on Monday at $172.23.
Below, we analyze the technicals in the Coinbase chart.
Descending Broadening Formation
Since last November, Coinbase shares have been retreated in a descending widening formation. The 50-day moving (MA) is poised to cross under the 200-day MA, forming an ominous Death Cross, a chart pattern which signals lower prices.
In recent weeks, the stock has moved towards the formation’s lower tendency line, but the volume of trading declined for most of March. This indicates a waning interest in the shares.
The relative strength index (RSI), which warns investors of a weakening price trend, is also nearing oversold territory.
Investors will be looking for major levels of support and resistance on the Coinbase chart.
Major Support Levels
A break-down below the lower trendline of the descending widening formation could initially see the shares return to lower support around $146. Investors should look for buying opportunities near last year’s prominent swing low in September. This area also aligns with a number of similar trading levels between December 2023 to February 2024.
If the shares are sold below this level, they could drop as low as $115. This area would likely provide support close to a multi-month vertical line that links the peak of July 2023 and the trough of February 2024.
Key Resistance Levels to Monitor
Around $206 could be the price where initial upswings of the stock are met with selling pressure. Coinbase shares could face resistance at this point near the countertrend peak in March, which is aligned with a price range on the chart that stretches back to February last year.
A rally above this level will bring the $264 mark into play. This region, which is currently located just above the upper trendline of the descending widening formation, would likely attract attention near a range peaks and valleys that formed between April last year to February this year.
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As of the date the article was written, author does not own any above securities.
