Shares of Coinbase Jump as Trump Pledges to Make U.S. the 'Crypto Capital'
The major cryptocurrency name is enjoying a boost following Trump's avowed support but should you be buying in?
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Shares of cryptocurrency firms gained early on Monday after presidential candidate Donald Trump talked up bitcoin and crypto, promising friendlier regulation for the industry at a conference in Nashville over the weekend. He vowed that he'd make the U.S. the "crypto capital of the planet."
Let's check out the charts and indicators for one of the industry's biggest names, Coinbase Global COIN.
In my June 24, 2024, review of the charts, I saw weakness and wrote that "I look for the charts of COIN to weaken over the next several weeks. A break of the May lows in the $200-195 area is likely to precipitate further declines."
In this daily bar chart of COIN below, I can see that prices did not break the May lows and have rallied in July. Prices are trading above the rising 50-day moving average line. The slope of the 200-day moving average line is positive. The trading volume has declined since March. The On-Balance-Volume (OBV) line shows a decline since March. The Moving Average Convergence Divergence (MACD) oscillator has been moving around the zero line but is now above it.
In this weekly Japanese candlestick chart of COIN below, I do not see much improvement since my last review in June. Prices are still trading above the rising 40-week moving average line. The most recent candle pattern has an upper shadow telling me that traders rejected the highs last week. The weekly OBV line has been flat/neutral the past five months. The MACD oscillator has been correcting lower since April but has narrowed in recent weeks.
In this daily Point and Figure chart of COIN below, I can still see a potential downside price target in the $181 area. A trade at $272 or higher may be needed to turn this chart bullish.
In this weekly Point and Figure chart of COIN below, I can see a potential upside price target in the $389 area. A trade at $284 will refresh the uptrend.
Bottom line strategy: COIN is trading higher in the pre-market Monday but it is still short of making an upside breakout based on the charts above. Prices did not decline as I thought in late June but prices are not prepared for an upside breakout just yet. Keep your powder dry for now.
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