Coinbase Textbook Bottoming Pattern Found
Updated
Hi Guys! This is a Technical Analysis of Coinbase (COIN) on the 1 week timeframe.
As you can see we have drawn out a Inverse Head & Shoulder Pattern forming in COIN.
This is a textbook pattern as it follows to the t the necessary criteria both in price action and volume.
Stages of the Price Action
Volume Signs of Textbook Inverse Head & Shoulder
1. Left Shoulder has taller volume bar (higher volume) than Head Volume
2. Lighter volume or shorter bars seen for Head than Left Shoulder
3. The rally from Head to Right Shoulder has increasing volume that exceeds volume of the rally from left shoulder to neckline
4. DOwntrend to Right Shoulder -> shows a declining volume bar height / declining volume
5. Sharp Spike on Volume during rally from Right Shoulder to Neckline breakout
6. Declining Volume during current move, the Return Move
Thoughts:
Both times we rallied from the shoulders we reached a Resistance zone and got rejected.
I believe we are currently in the "Return Move" to test the Neckline as Support
-> The areas i am looking is:
1. 0.5 FIB Level, this is also where the 21 EMA converges so a Support zone to watch
This area is important because it is the "Golden Zone" for FIB, as well as where the 21 EMA is at. This makes this area a place to observe for potential bounce. Though i believe this to be short lived.
2. Testing Support on the NECKLINE SUPPORT line
3. This one is least likely but nevertheless still possible, the 0.382 FIB Level, a potential scenario being a WICK down from testing support on Neckline
After testing these levels i believe that Coinbase will start its Bull run where it has tremendous growth in market cap
A first target would be breaching the Resistance zone and confirming it as Support.
Take a look for yourself. Experts let me know what yall think!
Stay tuned for more updates on COIN in the near future.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
As you can see we have drawn out a Inverse Head & Shoulder Pattern forming in COIN.
This is a textbook pattern as it follows to the t the necessary criteria both in price action and volume.
Stages of the Price Action
- Downtrend to form Left Shoulder
- The rally from Left Shoulder does not breach the Neckline
- Downtrend from peak of rally to form Head
- The rally from the Head also does not breach the Neckline
- Downtrend from Peak of rally to form Right Shoulder
- The rally from the Right Shoulder breaches the Neckline
- A Return move from the breakout back to Neckline -> This stage we are currently playing out
Volume Signs of Textbook Inverse Head & Shoulder
1. Left Shoulder has taller volume bar (higher volume) than Head Volume
2. Lighter volume or shorter bars seen for Head than Left Shoulder
3. The rally from Head to Right Shoulder has increasing volume that exceeds volume of the rally from left shoulder to neckline
4. DOwntrend to Right Shoulder -> shows a declining volume bar height / declining volume
5. Sharp Spike on Volume during rally from Right Shoulder to Neckline breakout
6. Declining Volume during current move, the Return Move
Thoughts:
Both times we rallied from the shoulders we reached a Resistance zone and got rejected.
I believe we are currently in the "Return Move" to test the Neckline as Support
-> The areas i am looking is:
1. 0.5 FIB Level, this is also where the 21 EMA converges so a Support zone to watch
This area is important because it is the "Golden Zone" for FIB, as well as where the 21 EMA is at. This makes this area a place to observe for potential bounce. Though i believe this to be short lived.
2. Testing Support on the NECKLINE SUPPORT line
3. This one is least likely but nevertheless still possible, the 0.382 FIB Level, a potential scenario being a WICK down from testing support on Neckline
After testing these levels i believe that Coinbase will start its Bull run where it has tremendous growth in market cap
A first target would be breaching the Resistance zone and confirming it as Support.
Take a look for yourself. Experts let me know what yall think!
Stay tuned for more updates on COIN in the near future.
Thank you for taking the time to read my analysis. Hope it helped keep you informed. Please do support my ideas by boosting, following me and commenting. Thanks again.
If you have any questions, do reach out. Thank you again.
DISCLAIMER: This is not financial advice, i am not a financial advisor. The thoughts expressed in the posts are my opinion and for educational purposes. Do not use my ideas for the basis of your trading strategy, make sure to work out your own strategy and when trading always spend majority of your time on risk management strategy.
Note
We have touched BELOW 0.5 FIB level. Getting close to our Neckline SUPPORT test. Currently attempting to move back ABOVE 0.5 FIB. Watch closely in coming weeks.I would start strategizing here with BUY Orders. * Not financial advice*.
Note
Interesting how as soon as we test the neckline, ETF news drops causing a 10% jump. I hope people were on the right side of this. :) I know i was.Note
Quick update on this pattern.
We have reached another Re-test of Support on Neckline.
This indicates Return Move still in Progress.
Volume is characteristic of Return Moves. Usually Return moves occur on Light Volume.
For the start of the Uptrend that usually occurs after Return Move, look for Volume to start to increase.
Just keep in mind, A candle body close/ confirmation below neckline will INVALIDATE the Inverse Head & Shoulders.
Note
This area can make for taking positions. Could make for a nice swing to long term trade. Stop loss below Neckline to a % loss you a comfortable with. I wouldn't go past 5%. Not financial advice. Just my Opinion.
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