Coinbase stock price has surged by over 140% from its level in April, and is now hovering at its highest level since 2021 when it surged to its all-time high. Its market capitalization has jumped to over $90 billion, making it one of the top financial services companies in the US. This article explores why the COIN share price is about to explode higher soon.
Coinbase stock price to explode as Bitcoin nears breakout
The main bullish catalyst for the Coinbase share price is the upcoming Bitcoin breakout after days of consolidation.
First, as the long-term chart below shows that Bitcoin sits slightly below the ascending trendline that connects the highest swings since December 2017. It failed to move above that level in April and November 2021, and January and May this year.
Notably, Bitcoin has formed two rounded bottoms in this period. Therefore, my expectation is that the BTC price will eventually surge above the upper side of this ascending trendline. Such a move above the multi-year line will likely lead to more gains in the long term.
Read more: Bitcoin price prediction: BTC path to $300,000 revealed
Second, the shorter-timeframe Bitcoin price chart points to more gains in the coming weeks. It has formed a bullish flag pattern, comprising of a tall vertical line and a descending channel. This pattern normally leads to more gains over time.
Bitcoin has also created a cup-and-handle pattern, comprising of a rounded bottom and a consolidation. In this case, the consolidation is part of the handle section of the cup-and-handle pattern.
Therefore, the most likely scenario is where the Bitcoin price stages a strong comeback in the near term. If this happens, Bitcoin could surge to at least $150,000 later this year.
Why COIN stock rises when Bitcoin is jumping
A strong Bitcoin price comeback is bullish for Coinbase for three main reasons. First, Coinbase shares often do well when Bitcoin is in a strong uptrend and drop when it is falling. This performance is usually because of the overall market sentiment.
Second, Coinbase is one of the biggest Bitcoin holders in Wall Street with over 9,260 coins currently valued at almost $1 billion. As such, Coinbase’s balance sheet improves when BTC is in an uptrend.
Third, Bitcoin gains often translates to higher altcoin prices over time, which is notable because Coinbase is a top player in the staking industry. Also, higher prices lead to a more transactions, which benefits Coinbase and other companies.
Further, Coinbase is benefiting fro the ongoing Bitcoin and Ethereum ETF inflows because it is the biggest custodian in the industry. Spot Bitcoin ETFs have added almost $50 billion in inflows this year, while Ethereum are nearing the $4 billion milestone.
Coinbase share price analysis
The daily chart shows that the COIN share price has jumped in the past few months. It has formed a golden cross pattern as the 50-day and 200-day moving averages crossed each other.
Coinbase stock has formed a cup-and-handle pattern, a popular bullish continuation sign. This pattern comprises of a rounded bottom and some consolidation.
The cup has a depth of about 58%, and measuring the same percentage from its upper side gives it a target of $551, up by over 55% from the current level.
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