• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Is Coinbase Stock About to Crater? Here’s One Way to Exploit It
Stock

Is Coinbase Stock About to Crater? Here’s One Way to Exploit It

by March 13, 2024
by March 13, 2024 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

With an astounding SCTR score of 99.6, Coinbase (COIN) is soaring to the sun, but its wings of momentum appear to be melting.

Despite hitting a two-year high (and Bitcoin hitting an all-time high), the entire crypto marketspace is in a foggy haze of confusion, stemming from the Federal Reserve’s March 11 Bank Term Financing Program (BTFP) expiration (which can affect liquidity and affect various markets including Bitcoin), and the upcoming Bitcoin halving mid-April. COIN’s potential bearish setup is clear. As an aside, it also came up as part of a bearish Filled Black Candles scan using StockCharts’ scan engine.

So, if you’re looking to maul a few hopeful bulls in the near-term, here’s your potential kill box.

CHART 1. DAILY CHART OF COINBASE.

The Relative Strength Index (RSI) locates COIN’s price, well within “overbought” territory. But if you look at the Chaikin Money Flow (CMF) reading, not only do you see a dramatic divergence between buying pressure and soaring prices, but the CMF is now below the zero line, hinting that sellers are potentially taking over. Yet if you look at the current candle, you see a strong rejection off the session lows, meaning that a lot of buyers jumped in to create the “pin bar” that we now see (see blue circle highlighting the wick).

So, what do you think might happen once price falls below the pin bars low?

One Possible Way to Trade This

There are likely several stop losses right below the wick at $242.09 (see black dotted line). If prices fall below this level, it’s likely to trigger a cascade of sell orders (stop losses).

If you’re looking to take advantage of this bear run, you might set a sell stop order to go short at $242.05.You might think of placing a stop loss (buy to cover) at $271.70 (just five cents above the most recent swing high).Your first target would be anywhere in the range between the  middle Bollinger Band and the resistance line at approximately $188.00.Your second target would be at the support line located at $166.00, the last major swing low.

Bear in mind that this is not a long-term trade but a short-term bearish opportunity. It has no bearing on any fundamental case—bullish or bearish—surrounding COIN’s longer term prospects.

The Bottom Line

Despite its stellar SCTR score of 99.6 and seemingly unstoppable ascent, Coinbase (COIN) may be flying too high, risking a dramatic fall. For those who smell a bearish opportunity, this potential descent offers a clear setup for entry and exits. Be careful! Going short the market can assume unlimited. Hence, the stop loss is a few cents above the highest high.

How to Run a StockCharts Scan

Finding the right stocks and exchange-traded funds (ETFs) to trade can be tricky. But, with a little work, you can create a strategy that identifies a few promising prospects.

Fortunately, it isn’t too hard to learn how. Just stick to these steps:

Select (or create) a few different scan criteriaBe sure to run these scans regularlyAnalyze the stocks (or ETFs) that your scan has identifiedDetermine your overall trading setup (including your entry and exit criteria)

The StockCharts Scan Engine is useful for narrowing down stocks and ETFs that match certain requirements. It comes with a bunch of ready-made scans that are a good starting point. As you get the hang of these scans, you can adjust them or create new ones that align with your trading goals.

For example, this article was prompted by a Runaway Gap Ups scan. As you can imagine, there are plenty more scans you can run. Try out the StockCharts Sample Scan Library (Charts & Tools > Sample Scan Library).

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

You Might Also Like
  • What Would a Top in Semiconductors Mean for the S&P 500?
  • Seasonality Points To Higher Prices NOW
  • Top 3 Pitallfs YOU Probably Make When Trading
  • When You See Amazon Turning Around Beautiful Things Start To Happen
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Schiff spars with Hur in heated exchange over report that ‘disparaged’ Biden: ‘That did not happen’
next post
What Loss?! NVIDIA and ORACLE Rip Higher

You may also like

Earnings Preview: The Technical Temperature

January 29, 2024

Rules-Based Money Management – Part 8: Putting Trend-Following to Work

June 6, 2024

Broad-Based Rally Puts Markets in Bullish Position

June 2, 2023

The Ord Oracle January 24, 2023

January 25, 2023

Follow Key Earnings Reports this Season with the Earnings Calendar!

January 16, 2023

DP Trading Room: Black Swan Monday

January 27, 2025

DP Trading Room: Gold Hits Another All-Time High

February 10, 2025

BITCOIN Rally Picks Up Steam, What’s Next?

February 27, 2024

The Halftime Show: Inflation Back in the Driver’s Seat

February 14, 2024

Week Ahead: NIFTY May Stay Tentative; Look For Stocks With...

June 15, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Week Ahead: Markets Stare At Imminent...

    April 16, 2023

    Sector Spotlight: Strong Seasonal Sector Rotation

    May 2, 2023

    Week Ahead: Upsides For NIFTY May...

    April 28, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here