Coinbase Global, Inc. operates as a secure hosted bitcoin wallet to purchase and use bitcoin. It provides merchant tools that enable companies to accept payments in bitcoin by incorporating a single button.
Take a look at the 1-year chart of Coinbase (NASDAQ: COIN) below with the added notations…
Chart of COIN provided by TradingView
COIN has formed key support at around $160 (green) over the past several weeks. In addition, the stock is also declining against a down trending resistance line (red). These two lines has COIN trading within a common pattern known as a descending triangle. Eventually, the stock will have to break out of it.
The Tale of the Tape: COIN has formed a triangle pattern. A short trade could be made on a break of triangle support, while a long trade could be made if the stock were to break above trendline resistance. Either way, protective stops should be used.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Good luck!
Christian Tharp, CMT
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