ARK Invest heavily reduced its positions on Coinbase by selling $26.23 million worth of shares over the past week. However, technical analysis paints a bullish picture as both the weekly and daily time frames support the rise. In any case, falling below the resistance line of the current pattern could trigger a sharp drop toward the support line of the same pattern.
Coinbase (COIN) hit the highest weekly close since April 2022 last week. The close was also made above the $100 horizontal resistance area.
ARK Invest reduced its position in shares of the exchange, Coinbase by $26.23 million. This was the third sale in the last seven days.
COIN Weekly Close Validates Breakdown
The flagship ETF fund “ARK Innovation” sold 127,266 shares, “ARK Next Generation” sold 44,784 shares, and “ARK Fintech” sold 76,788 shares.
However, technical analysis paints a bullish outlook. The COIN price is showing bullish signs on both the weekly and daily time frames, which could lead to a continued rise.
The COIN price has increased since the beginning of the year. It created a higher low in June and accelerated its rate of increase afterward. Last week, the price closed at $105.
This was the highest close since April 2022 and also triggered a break above the $100 horizontal resistance area. Therefore, it is a significant bullish sign that could mean that the bullish move is just beginning.
Also, the weekly RSI supports the ongoing rise. The RSI is a momentum indicator used by traders to assess whether a market is overbought or oversold and to determine whether to hoard or sell an asset.
Readings above 50 and a bullish trend suggest that the bulls still have an advantage, while readings below 50 indicate the opposite. The indicator is above 50 and rising, both signs of an uptrend.
How Long Will Coinbase’s Stock Price Rise Continue?
The daily time frame offers two possibilities for future movement. It is most likely bullish given the price action and wave count. Using Elliott Wave theory, technical analysts examine long-term price patterns and the psychology of recurring investors to determine the direction of a trend.
The most likely count suggests that the COIN price has just started wave three of a five-wave rise. This is also supported by the fact that the price has just broken out of a rising parallel channel.
If the count is correct, the price will complete wave three near $150 before revalidating the resistance line of the channel as support. Then another rise to $170 is likely.
Despite this bullish COIN price prediction, falling below the resistance line of the channel will mean that the trend remains bearish.
In that case, the COIN price will likely have completed an ABC correction (black) and could drop to the channel support line at $65.
Crypto Experts’ Warnings
While many industry players are turning increasingly bullish on Coinbase, the team of analysts at investment firm Berenberg Capital Markets warned that many aspects of cryptocurrency exchange regulation are far from resolved.
In a July 17 investment note, lead analyst Mark Palmer said that Coinbase Earn, a financial product that offers returns on staking cryptocurrency, appears “particularly vulnerable” to being defined as a security, in light of comments made by Judge Torres in her Ripple ruling.
By Audy Castaneda
