The Coinbase stock price has perfectly mirrored Bitcoin’s recovery over the last few days. Indicating COIN’s prospects are, more than ever, reliant on BTC.
Coinbase Global Inc (COIN: NASDAQ) gained $8.21 (+3.33%), closing at $254.90 and crucially, above the important $250.00 level.
In the last three days, Bitcoin has recovered 26% from its weekend lows. Subsequently, COIN has gained 25% from Friday’s close. Coincidence? obviously not.
Coinbase debuted on the Nasdaq exchange five days before the infamous crypto market crash of May 19th. At its low point last week, BTC had dropped 55% from its may $65,000 high.
Similarly, last week’s low trade of $210.77, was 51% below COIN’s opening day $429.54 high.
And until the crypto market becomes more established, this high correlation is likely to remain. This is logical, considering Coinbase stock offers institutions proxy Bitcoin exposure.
The Investment mandate of many firms limits them to holding exchange-listed products. Therefore COIN, similarly to Microstrategy Inc (MSTR: NASDAQ), is seen as a Bitcoin proxy.
Furthermore, the nascent crypto industry is still developing and could be compared to the tech market in the late 1990s. On this basis, Coinbase is comparable to the Nasdaq exchange in the same period.
If the crypto market follows the path of the post-2000 Tech market, the Coinbase stock price could do extremely well over the next few years.
However, for now, the only thing that matters is the Bitcoin price.
COIN price prediction
The 4-hour chart highlights three key areas for COIN:
The $208.00 low point can be considered Bitcoin at $30,000.
Secondly, I would suggest $250, translates to BTC at $35,000.
The third is $306. This is clearly Bitcoin at $40,000.
So there you have it. If Bitcoin trades down to $30k, the Coinbase stock price will likely retest its $208 low. However, if BTC firms to $40,000, COIN should follow to $300.
If Bitcoin fails to hold last week’s lows, I project, the next support level is around $24,000. This would crudely suggest COIN could fall somewhere between $170 and $180.
However, a sustained recovery in BTC would take Coinbase along for the ride.
So, for now, all is well. And if BTC maintains its recent strength, all will continue to remain well. The danger is if BTC turns lower.
Coinbase stock price chart (4-hour)
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