Shares of Coinbase Global (COIN) rallied sharply Tuesday on reports that venture capital company Grayscale Investments won their SEC lawsuit for Bitcoin ETF review. The appeals court said, "The SEC's decision to reject the Grayscale Bitcoin ETF application was 'arbitrary and capricious' in its ruling." The SEC can appeal this ruling but in the meantime crypto fans are excited.
Let's review the charts of COIN which is involved in the world of crypto and may well offer trading in a Bitcoin ETF should it materialize.
In this daily bar chart of COIN, below, I see an up and down trading pattern the past year. Prices rallied in June and July but corrected steadily from the middle of July. Trading volume spiked up at the time of the July high suggesting some investors used the price strength to sell. The On-Balance-Volume (OBV) line has been weakening since mid-July. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of COIN, below, I see a developing and still playing out base pattern. Prices rallied above the bottoming 40-week moving average line but also have pulled back several weeks towards the line. Weekly trading volume has been very active since late May but it has not translated into sustained price gains.
The weekly OBV line is in a longer-term weakening trend. The MACD oscillator is only slightly above the zero line and looks like it will cross to the downside for a take profit sell signal.
In this daily Point and Figure chart of COIN, below, I can see an ambitious (in my opinion) upside price target in the $112 area.
In this second Point and Figure chart of COIN, below, I used weekly price data. Here, a price target of $248.
Bottom line strategy: I feel that much of the cryptocurrency moves - up and down - have been driven by emotion. COIN has rallied and corrected, and I would not chase its recent strength.
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