Coinbase Plunges Despite Bitcoin, Ethereum Holds Strong: What’s Going On? – Coinbase Global (NASDAQ:COIN)

Coinbase Global Inc COIN fell more than 8% on Tuesday, in sympathy with S&P 500which fell around 2% lower on recession fears.

The cryptocurrency exchange can be both positively and negatively affected by the general markets and the crypto sector, but despite Bitcoin BTC/USD and Ethereum ETH/USD Coinbase held strong and couldn’t find buyers to back it up.

The S&P 500 created a bull trap between November 30 and December 2, when it temporarily regained support at the 200-day simple moving average.

The move up above the indicator gave some traders and investors hope that the bear market may be entering hibernation mode, but on Monday and Tuesday the bears regained control.

Although Coinbase closed down more than 4% on Monday, Tuesday’s drop caused the stock to break down from a rising channel pattern. The pattern is bullish in the short term but could be bearish down the road.

For bullish traders, “the trend is your friend” (until it isn’t) and the stock is likely to continue to rise. Aggressive traders may decide to buy the stock at the lower trendline and exit the trade at the upper trendline.

• Bearish traders will look for a break from the lower rising trend line, on high volume, for an entry. When a stock breaks down from an ascending channel, it is a strong reversal signal and indicates that a steep downtrend may be in the cards.

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The coin base chart: Coinbase’s breakdown through the ascending channel pattern also saw the stock negate the uptrend within the parallel lines, which the stock began trading on November 22. Although the uptrend has been negated, Coinbase needs to print a lower high next time. bounce to confirm a new downtrend.

• If Coinbase closes the trading day near its low, the stock will hit a bullish kicker candlestick, which could indicate that lower prices will return on Wednesday. The second most likely scenario is that Coinbase prints an inside bar pattern to consolidate the steep decline.
• If the stock trades lower on Wednesday, bullish traders and investors can look for Coinbase to print a bullish reversal candlestick, such as a doji or hammer candlestick, at the low of $40.61, which was reached on November 21st. If Coinbase were to fall below that level there is no support below in terms of price history.
• While Coinbase is unlikely to reach oversold territory on the daily chart until the stock forms a new all-time low, a test of the $41.60 level on the hourly chart would sink Coinbase into oversold territory, potentially providing an area for a bounce .
• Coinbase has resistance above at $44.15 and $50.34 and support below at $40.61 and the psychologically important $40 mark.

Read next: Coinbase CEO says Sam Bankman-Fried’s hedge fund used $8 billion in stolen customer money

Photo: Sergei Elagin via Shutterstock