Coinbase Stock (COIN) Is In Danger Of Crashing Another 60% By September – Here’s Why
Coinbase (COIN) stock rose 4.35% to $57 on July 27, having dropped nearly 20% over the past week. But further downside is likely despite the release of the first installment of Coinbase’s bored ape Yacht Club-featured movie. The Dagen Trilogy,
Dijon Trilogy: Part One
run the chain️
Here’s a look at what we’re building with the community ️ pic.twitter.com/RSV6McnMlw
— coinbase (@coinbase) 26 July 2022
Bad news halts COIN’s rally
Overall, COIN is down nearly 83% since the Nasdaq debut in April 2021, with weaker fundamentals and bearish technicals likely to cause more losses.
In short, COIN reached $79 on July 20, five days after breaking out of its “ascending triangle” pattern. As a rule, COIN should have a profit target of around $120, which is 130% higher than the July 27 price.
However, the stock’s bullish reversal was halted midway after reaching $79 surrounded by back-to-back negative news.
Initially, COIN’s correction began in the wake of a widespread return to the crypto market led by Bitcoin (BTC). Then, the negative move gained momentum after US officials Arrested a former Coinbase managerInsider trading” allegation.
But the biggest selloff during this correction occurred on July 26, when Bloomberg reported that the US Securities and Exchange Commission was investigating Coinbase for listing unregistered securities.
In response, Cathy Wood’s ARK Investment Management sold more than 1.4 million of the approximately 9 million Coinbase shares.
The coin closed down over 21% on July 26 at $52.93, while testing the upper trend line of the ascending triangle as support. In the process, COIN erased its perfect bullish reversal breakout move.
Bearish Continuation Setup Returns
Ascending triangles are usually continuation patterns. Hence, COIN may face further losses in the coming days if it moves back within its ascending triangle range.
RELATED: IMF Global Outlook Suggests Dark Clouds Ahead for Crypto
On the daily chart, a break below the upper trendline of the triangle could cause COIN to test the lower trendline near $45 for a breakdown.
Ideally, such a bearish move would push the stock towards a level that is equal to the maximum distance between the upper and lower trendlines of the triangle.
In other words, the COIN stock price could drop to $21 by September, which is about 60% lower than the July 27 price.
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