Coinbase Gearing Up for its next Move
Updated
Hi guys! This is an Update on recent Technical developments found for Coinbase (COIN).
I've successfully identified the Inverse Head & Shoulders Pattern. Check out that idea down below.
We have completed the Return Rally back to test Support on the Neckline. Now ive been assessing if there are signs that we continue the Inverse Head and Shoulders with our final explosive breakout move.
This analysis is done on the 1 day timeframe.
As you can see we have tested and CONFIRMED Support on the Neckline.
After doing so we have inched higher.
Notice now, we are ABOVE the 21 EMA.
With the last 3 days of candles, forming LOWER WICKS off the 21 EMA.
This is a great sign of SUPPORT.
We must continue to stay ABOVE the 21 EMA.
Being Above the 21 EMA on any timeframe indicates that we will most likely have an UPTREND in price.
Notice also the Orange Rectangle. This highlights a consolidation zone. This shows to me that we are building up momentum for our final rally of the Inverse Head & Shoulders Pattern.
A confirmation ABOVE the Upper Border of Rectangle, will indicate Rally may be starting.
To keep us on our toes, just remember that if price action goes BELOW the Lower Border of the Rectangle, we risk testing the Neckline again. Which is always a possibility. As long as we maintain the Neckline as Support, we good.
Watch VOLUME -> We need it to start picking up for indication of the major move.
This move will essentially lead to trend reversal for COIN, confirming the bottom.
__________________________________________________________________________________
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.
Stay tuned for more updates on COIN in the near future.
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.
I've successfully identified the Inverse Head & Shoulders Pattern. Check out that idea down below.
We have completed the Return Rally back to test Support on the Neckline. Now ive been assessing if there are signs that we continue the Inverse Head and Shoulders with our final explosive breakout move.
This analysis is done on the 1 day timeframe.
As you can see we have tested and CONFIRMED Support on the Neckline.
After doing so we have inched higher.
Notice now, we are ABOVE the 21 EMA.
With the last 3 days of candles, forming LOWER WICKS off the 21 EMA.
This is a great sign of SUPPORT.
We must continue to stay ABOVE the 21 EMA.
Being Above the 21 EMA on any timeframe indicates that we will most likely have an UPTREND in price.
Notice also the Orange Rectangle. This highlights a consolidation zone. This shows to me that we are building up momentum for our final rally of the Inverse Head & Shoulders Pattern.
A confirmation ABOVE the Upper Border of Rectangle, will indicate Rally may be starting.
To keep us on our toes, just remember that if price action goes BELOW the Lower Border of the Rectangle, we risk testing the Neckline again. Which is always a possibility. As long as we maintain the Neckline as Support, we good.
Watch VOLUME -> We need it to start picking up for indication of the major move.
This move will essentially lead to trend reversal for COIN, confirming the bottom.
__________________________________________________________________________________
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.
Stay tuned for more updates on COIN in the near future.
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
Quick update
We had a Big Body Bearish Candle print today. This tells me theres selling pressure coming in.
We also had a Large WICK candle print as well. This could have initiated this decline in price today.
Currently Below the 21 EMA. If we confirm, look to the Bottom of the range for Support. If we break this, look to the Neckline for next Support.
Notice also the STOCH RSI bearish cross, moving down. This can bring in bearish momentum that may help to push prices back to Neckline.
Keep cautious of this move. If we do reach the Neckline, we must by anymeans maintain Support on the neckline. If we break it, it can invalidate the Inverse Head and Shoulder pattern.
Neckline may make a solid opportunity to take positions here or add more.
Note
NOTE: The Lage WICK Print indicated a rejection from 50 SMA acting as Resistance.Note
We have reached the Neckline again. Attempting to establish Support here.
Look for Lower Wick prints on candles.
Which means we have not yet confirmed the completion of the return move.
But VOLUME does seem to support that Return Move maybe in the process.
Return moves are more common at Bottoms and occur on Light volume.
This is a crucial point for COIN. Heading back below the Neckline would INVALIDATE the Inverse Head & Shoulders.
Wicks would be fine but clear signs of candle prints BELOW would not be a good look for COIN.
Note
This area in my opinion is a low risk, high probability setup. My stop loss will be below the neckline to a % risk suitable to my comfort level. My 1st target will be the previous highs around $114. Not financial advice.Note
Another piece of evidence where i believe COIN is showing signs of "Gearing up for a Move" is seen on the STOCH RSI.This is on the 3 Day timeframe
Notice how Price action reacts with STOCH.
STOCH to me is a tool i tend to use alot to make sense of the Momentum of the markets in any given time.
We are currently in Oversold terroritory, under the 20 level.
Notice how in the previous STOCH data highlighted:
1. We were in this zone for a range of 43 to 65 days. (to build momentum)
2. Afterwhich, we had a Bullish cross ( Blue line crosses above Orange line) Above the 20 level to initiate Massive Uptrends.
Looking to the 3 data points plotted, when we've had Bullish Cross Above 20 level:
1. Our first rally gave roughly 160% gains
2. Our 2nd rally gave roughly 176% gains
3. Our 3rd rally gave 138% gains.
Our current data, indicates we are getting close to such a move on the STOCH.
Currently, we are 40 days in, in prior data is of any indication then sometime between 43 days to 64days, we may cross ABOVE. This would then initiate this final rally of Inverse H&S to Above Resistance Zone.
Remember also, things don't have to occur exactly how they did before. But it gives us hints on what can happen.
But look for a Bullish cross in STOCH RSI.
Note
This is a look into the 12 hour timeframe.
Notice how we've bounced successfully from a test & confirmed Support on Neckline once again.
We are in the process of breaking back ABOVE 21 EMA. If we confirm Support, this will add to the case of an uptrend.
Good signs so far.
RSI and MACD have printed a Higher lower indicating the presence of Bullish
Divergence.
Bullish divergence is:
Where Price action prints Lower low but indicators print a higher low. When theres multiple indicators showing Bullish divergence, it strengthens the idea further.
MACD is also showing signs of waning bearish momentum, with print of light Red histobars and looks to Cross Bullish soon.
RSI has moved Above the Moving Average. When this happens, it ensures an Uptrend is on its way.
The key though,
is to break ABOVE and confirm past the " Short term Resistance trendline in RED.
Doing so would begin our Uptrend to print a new Higher high or at the very least reach out resistance zone.
Note: We need to stay Above $70. If price drops below, we will print a Lower low. This may put us at risk of invalidating Inverse H&S.
Note
Price is currently in process of coming down to test this highlighted area
Where 2 Support trendlines meet
1. The Inverse H&S Neckline
2. Major Support that has propt up our current Uptrend in COIN since December 2022
NOte: For the Black line -> This will be our 3rd touchpoint on this Support trendline.
This is Major Support area.
We have to observe how it reacts.
Probabilities dictate that there is higher chance that we hold here.
Though the risk is low, we can also break to the downside. To keep us aware.
If we do break, it may indicate our UPtrend is over.
The inverse H&S will be Invalidated.
Also note:
Volume is on a decline as shown by the Blue Volume Moving Average.
This is still characteristic of the Return Move of Inverse H&S
Something to watch is for increase of Volume after bouncing off this Supportline.
Note
On the 1 day we are currently testing Resistance against 100 SMA.
Key is to get above and Confirm Support.
NOTE However, we are at an area with tremendous Resistance ABOVE us.
1. Red Resistance Trendline
2. 100 SMA
3. 50 SMA Above us
4. Some Horizontal Resistance levels as well ( which i have not highlighted, but are there nevertheless)
Concensus is still that we have yet another chance of reaching back down to test the Neckline/ Major Support trendline Below us.
Especially if signs of rejection from 100 SMA are evident.
But NOTE some Bullish Signs:
STOCH RSI has crossed BULLISH -> indicating Positive momentum coming into COIN
RSI has crossed ABOVE the Moving Average.
-> Note though, for this to be meaningful, we need to print a Higher High Above the Black Horizontal Resistance line i drew.
Also VOLUME is another important thing to watch. To move past all this resistance and validate the STOCH RSI cross. We need VOLUME to increase/ spike.
Note
Update on COIN on 1 day timeframe.
Notice our current Price action has Pierced Above the Current Resistance Red trendline.
But we have not yet CONFIRMED whether or not Price action can stay Above Resistance trendline. We must see whether or not in the coming days, that it acts as Support.
Notice though we have hit the 50 SMA, which is acting as Resistance. Seen by the Upper wick from yesterdays candle.
We have to watch how we interact here, key is to eventually get Above and CONFIRM Support on 50 SMA as well.
NOtice also how we have maintained Support on 21 EMA for 1 day. In order for us to maintain our Uptrend, we need to maintain this as support as well.
A Key indicator, in my opinion to gauge at whether or not we can surpass the resistance levels is VOLUME. As long as we get a rise in Volume, we should have the 'juice" to move forward. If we don't get a rise in Volume or a spike in volume, it will question the integrity of this breakout attempt.
Notice also how my momentum Indicators MACD and STOCH RSI are showing Bullish signs.
MACD must continue to give us Green histobars, perferably ones that increase in size to the prior bars. A continuation of the Bullish cross ABOVE the 0 level, will also be another critical sign. It usually leads to stronger UPtrends.
STOCH RSI as long as we see a Bullish Cross, bullish momentum will continue to be injected.
However, a key Bearish sign is when Blue line crosses below Orange line and we dip below the 80 level.
Note
Giving some context from Previous posts.
I was following the Inverse Head & Shoulder pattern in COIN for some time.
Blue labeled drawings are part of the I H&S.
Notice how we had Right Shoulder rally, break above Neckline
Followed by the Return move from peak of RS rally to test Support on Neckline.
Our next and final move is to Continue Up for another Higher high above RS rally peak. Which i think we are building momentum for.
After 1st touch of Support on Neckline, began a Consolidation pattern for COIN.
VOlume supports this with Low Consistent volume, characteristic of Consolidation.
Also note this Volume is characteristic of Return Moves of Inverse H&S.
After 1st touch we made our way up to form Upper border of Consolidation Pattern ( Also known as Rectangle pattern).
Break ABOVE Upper border will initiate a continuation of COIN Uptrend. In this situation, Volume must INCREASE significantly.
Followed by downward price action to reach our 2nd Support touch on Neckline
and create our lower limit of the Consolidation pattern.
A Break Below here will cause Reversal back down in price and re-test of Neckline.
This also prints a Lower low, which may put at RISK the integrity of the Inverse H&S.
Todays candle is a Mixed candle by nature. But note we have kept a Higher low consecutively since Sept 13th.
Our current candle has also wicked off 3 Support trendline meeting zone.
1. Our Major Support trendline maintaining SUpport since Dec. 2022
2. Previous Resistance now Support Orange Trendline
3. Horizontal Black colored Support Trendline
Bounce off the Orange trendline, in particuarly is a Great sign as it indicates a possible Trend change attempt confirmation. Which can cause further upside. As long as we maintain support on this line.
So our Major Resistance trendline is the Upper border of Rectangle or Consolidation pattern.
But before getting there we must break through 3 resistance lines.
#1 is our immediate, short term Resistance, we are attempting to break.
#2 is an important Horizontal Resistance irectly above us as well.
#3 Is another potential Upper limit of Uptrend Channel that may be future resistance
If we can break #1 and #2, chance we attempt to test Resistance at Upper border becomes highly likely.
Breaking the Upper Border of Rectangle is the most important move required to see further Upside.
Note
We are currently in the Process of Penetrating the Upper Border of Rectangle Pattern! Watch how we interact here. Might not Happen in 1 day and can get slight pullback.
But ultimately a Confirmation of Support on Upper Border will be indicative of a Continuation move to Upside. As consolidation zones are continuation patterns usually.
Confirmation of Support on Upper border will be a great area to take positions if you havent taken any on Neckline.
RSI has printed a Higher HIgh, after months of not getting past the 55-56 RSI level.
MACD and STOCH RSI has crossed BULLISH -> indicating the presence of Bullish momentum.
Like to see these signs trickle up to larger timeframes, which will get COIN to gain more traction and move higher. Stay tuned. Weekly timeframe getting close to some monumental bullish signs.
Note
As it is known, last week we had an attempt to break out of Consolidation range that was met with resistance and thus FAILED.
Resistance came from
1. the Upper border of Consolidation rectangle
2. Red parallel resistance line
This led to 4 consecutive Red days
Price decline had us reach the Bottom of the Consolidation zone and the Previous Resistance now Support line.
It also had us temporarily down below the Major Support trendline that has propt up our Uptrend since December 2022.
We tested Support and confirmed with a nice bounce back Above the Major Support line.
We have also made it back ABOVE 21 EMA and 50 SMA, look for a golden cross for necessary sign that this final rally to break previous high in July 2023 is underway.
Look for confirmation of Support ABOVE these 2 Moving averages.
We continue to tred sideways as indicative of this consolidation zone.
Significant moves will be determined by the break UP or DOWN of this range.
Some signs in the Volume and indicators can help us gauge at what may be likely.
Notice how at the start of the consolidation range, Volume has been consistently LOW. this is supportive of the return rally to neckline.
Now notice how there has been a slight increase or uptick of VOLUME as indicated by Blue moving average. This maybe giving us signs that this final rally maybe under way!
Also notice our RSI, especially the Orange trendlines drawn. Notice this sideways action here as well, indicative of consolidation. For our next rally to occur, we must get ABOVE the Upper Horizontal Resistance trendline and Above the peak of the failed attempt.
If we break below the Uptrending Support trendline, that may indicate further price declines.
Our MACD is also showing signs of tightening consolidation, eventually one way has to give. Current we have CROSSED Bullish. For Upside continuation of this consolidation zone, we need a BULLISH CROSS of MACD to go ABOVE the 0 level. This will bring in the necessary Buy pressure to break UP out of the rectangle.
This overall COIN idea of mine, is based entirely on my identification of Inverse Head & Shoulders at play. As long as we stay ABOVE the neckline, this bottoming pattern is INTACT. (Note the neckline is not drawn on this graph)
TA experts say that you should never trade inside of chart patterns, but that can be debated. Especially for this instance, since the existance of 2 ( Rectangle consolidation pattern and the Inverse H&S. I based my entry points on the Inverse H&S only.
This is not financial advice, but my approach was to scale in near the neckline. I have also added positions on the touch of the Orange Previous Resistance now Support line.
But a high probability trade idea would be to enter positions with Confirmation ABOVE the Upper Border of Rectangle or BELOW the Lower Border of the Rectangle.
Note
Quick update.
We have reached the upper border of the consoidation rectangle.
Price action currently in the process of attempting to assess next move.
We are being pushed down by the Consolidation resistance and Red resistance line.
We do have short term support around the $86.00 level.
Watch for a lower wick on the daily candle or weekly candles.
Watch the Volume as well, if we pick up on Volume, we could break past the resistance of the consolidation zone.
But i mainly wanted to highlight some risk management ideas.
Notice the 21 EMA in purple.
It reached and has met up with the Major Support line since Dec 2022.
This is a great sign of MAJOR SUPPORT times 2 coming in to protet us.
I am now in the camp we will not see BELOW $80.
This is also a good time to move stop losses up to protect your gains.
I have placed a 5% stop loss below the 21 EMA. Notice how im using this confluence of supports as an area to set my Stop loss. Whatever happens i have protected myself with gains, in the worst case.
Note
We have today, gapped up to break past COnsolidation.
This is a sign we may have started our next rally to higher highs.
COnfirmation will be required however, where we test support on the upper border of the Consolidation range. ($90)
If this doesnt hold look to:
Red Resistance now Support line
Horizontal Black line at $84
VOlume continues to steadily INCREASE, necessary sign to help provide liquidity for move up.
RSI hitting Overbought terroritory. Keep in back of mind, there is plenty of room for buying to continue.
STOCH RSI, is also looking like Bullish momentum will continue little longer.
BUT do pay attention to Bearish cross down and more importantly if the Bearish cross goes below 80 level, this will trigger selling. Which will lead our price to test our support levels to actualize this current Jump up.
I have taken a little profit so far. ANd i recommend doing so, since COIN showing signs of being a BUY the dip type of asset.
But i think this current move can reach $110-115 possibly, which is a major resistance area and coincides with previous high after neckline break.
Note
HEAVY SELLING PICKING UP, profits should of been taken or should be taken.INtraday timeframes hit MAJOR OVERBOUGHT COnditions on RSI (15mins, 1hr)
On 1 Day MASSIVE UPPER WICK Showing crazy sell pressure. May not be a good sign and id be very cautious.
We maybe gap filling back down to touch Upper COnsolidation border or the support trendline below it in black at $84 lvl.
Note
We have reached the Upper Consolidation border and Red Resistance now Support line around $89-90 level.
Attempting to test SUPPORT here.
Look for confirmation of Support in order to assess Consolidation zone has been broken to continuation of Uptrend.
Confirmation must maintain Body of the candle close ABOVE $89-90 level
If Support does NOT hold, look to the:
1. Black Horizontal Support line (around $84)
2. 21 EMA now moving Up (currently around $83.00)
I am EXTREMELY Cautious here. Especially with the print of a Gravestone Doji candle. Which is a uptrend reversal indicator. This is why we are down 10% so far.
Hard to assess the extent of how much downside is possible with this Doji Candle. But the probabilities are there.
We can cool off down to the $83-84 or re-test the Major Support line from December 2022, worst case scenario. If we don't confirm Support ABOVE $89-90.
I will consider to add to positions if we go to low $80's.
Note
We have reached our Resistance/ Sell zone. Note, in my opinion this is a strong resistance area.
On the Daily timeframe, notice that indicators are flashing OVERBOUGHT conditions. We maybe losing juice to continue this uptrend.
Due to this reason, i have started taking profit and have moved my Stop loss for protection of my profits.
I am in the thought process that we will have a PULL BACK now that we have reached this zone.
The range we must watch is this 120 - 160 range. I think it maybe possible for us to move near $160. But past that probabilities are less.
This range is a perfect area for people who are at a loss would sell.
This is currently our 3rd touch of this Supply zone. In trend theory, 3 or more touches are required to break a specific level or zone. So keep an eye.
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