- Coinbase stock price has wavered in the past few weeks.
- The stock has formed an island reversal pattern, pointing to a retreat.
- The company has some bullish catalysts, including the rising USDC volume.
Coinbase stock price has moved sideways since March 4 as investors observe the state of the crypto market. COIN was trading at the crucial $200 resistance level on Monday, up 44% from its lowest level this year. So, will the stock continue to rise or fall in the near term?
Coinbase Stock Price Technical Analysis
The daily timeframe chart shows that the COIN share price has remained in a narrow range in the past 20 days. It has remained inside the key support level at $191 and the resistance at $213.
The stock is loitering near the 23.6% Fibonacci Retracement level. It flipped the Supertrend indicator from red to green and moved slightly above the 25-day Exponential Moving Average (EMA).
The risk, however, is that the stock has formed an island reversal pattern, which often follows an asset forming a gap. In this case, the gap happened on March 4, and the consolidation has continued since then.
The Relative Strength Index (RSI) has pulled back and is hovering near the zero line. Therefore, the stock may retreat in the coming days. If this happens, the next key target level to watch will be at $170.
On the flip side, a move above this month’s high of $215 will point to more gains, potentially to the 50% Fibonacci Retracement level at $292, up by 45% above the current level.
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Coinbase Business Has Some Major Catalysts
COIN stock price has some potential bullish catalysts that may push it higher in the coming weeks or months.
For example, the crypto market has held steady over the past few weeks since the war started, with inflows into Bitcoin, Ethereum, and Solana ETFs continuing to rise. Bitcoin funds have added over $1.5 billion in inflows this month. Ethereum has added over $300 million in value, a sign that investors are accumulating these coins.
COIN’s stock price will do well when Bitcoin and other altcoins stage a strong comeback, as that will drive higher volume and transaction revenue.
Coinbase stands to gain from the recent launch of 24/7 trading for leading American equities, including Tesla, Apple, and NVIDIA. Additionally, the company will benefit from continued growth in USDC’s market capitalization. Recent data indicates that the supply of this stablecoin has increased to over $80 billion, up from a low of $70 billion just a month ago.
A significant amount of these funds is in Coinbase, which keeps all the interest it earns. The most recent data showed that stablecoin revenue jumped to $1.34 billion last year from $910 million the year before.
Coinbase will also benefit from the rising government bond yields. Data shows that the 10-year yield rose to 4.37%, while the 2-year yield grew to 3.97%.
Coinbase benefits from higher interest rates because of the funds on its platform. Its interest and financial fees rose to over $554 million last year from $425 million a year earlier.
Still, there are signs that Coinbase is highly overvalued, with its forward price-to-earnings (PE) ratio of 52, well above the sector median of 9.5. It is much higher than the five-year average of 41.
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