Coinbase (COIN) stock price has almost doubled from its June lows with the potential for much more gains this year, according to a combination of technical and fundamental indicators.

Reversal of the symmetrical triangle COIN

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COIN is undergoing a strong bullish reversal after dropping almost 90% from its all-time high of $368.90 in November 2021.

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Coinbase’s share price is up more than 95% to $75.27 as of the July 20 close, compared to the May 12 local low of $40.83. Its recovery resulted in a symmetrical triangular pattern with price making a succession of lower highs and higher lows.

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Symmetrical triangles in a downtrend usually turn out to be bearish continuation patterns. They resolve after the price breaks below their lower trendlines to fall further. But in rare specimensa symmetrical triangle may form at the end of a downtrend, leading to sharp bullish reversals.

By all appearances, COIN has already entered the breakout stage of its symmetrical triangle reversal pattern. Notably, on July 28, Coinbase shares closed above the upper trend line of the structure, accompanied by an increase in trading volume, as shown below.

Daily COIN price chart with a symmetrical reversal triangle. Source: Trading View

COIN is now testing $80 as its temporary resistance, expecting further gains to $135. Target profit is determined after calculating the maximum distance between the upper and lower trend lines of a symmetrical triangle and adding the result to the breakout point.

The uptrend target appears closer to the 200-day exponential moving average of COIN (200-day EMA; blue wave in chart above) near $153. This psychologically raises the possibility that COIN will form a bullish wick towards $153 if it hits $135 this year.

This would mean a 102% increase from today’s price.

Coinbase Valuation: First Quarter Earnings

Coinbase’s first-quarter earnings were disappointing due to weaker-than-expected revenue and a significant drop in the number of users making monthly transactions.

The firm did not disclose any cost management plans in the mentioned earnings report, but a report published by the Financial Times in June of this year shows that it will cut nearly a fifth of its workforce. Additionally, Coinbase ended its popular affiliate program in July. business insider.

“Our target price [COIN] about 52 dollars [in 2022]” noted Rumak Research, a group of financial analysts, in their recent assessment of Coinbase. This analysis was based on reactions to past market cycles combined with their capital asset pricing model (CAPM), as shown below.

Coinbase valuation based on the CAPM model. Source: Rumak Research/Seeking Alpha.

According to Rumak Research, the target price for the stock is around $160. Current average market risk premium in the US 5.6%.

Coinbase Closes Coinbase Pro to Unify Trading Services

Similarly, DA Davidson analyst Christopher Brandler noted that Coinbase will survive the cryptocurrency bear market despite its “financial position,” including $3.4 billion in long-term debt. However, the company is still sitting on $6.1 billion.

“The fact that they have to downsize a bit may not be the best news, but ultimately I know that they will not be in a situation where they will fight for survival,” Brandler. told Forbesadding:

“They’ve been through this before and I’m sure they can go through it again.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Every investment and trading step involves risk, you should do your own research when making a decision.