Coinbase (COIN) emerges from supply exhaustion: What's next for the crypto giant? [Video]

Coinbase Global, Inc (COIN) is a publicly traded cryptocurrency exchange platform in the US. It is the largest US exchange by trading volume, serving both retail and institutional investors. The company offers products such as the Coinbase app for buying, storing, and trading cryptocurrencies, Coinbase wallet, and Coinbase NFT. Coinbase trades over 50 different digital assets.

Log scale has been used for this 13-month chart of COIN for clearer illustration.

COIN has been in a down trend since Nov 2021. The inability of the price to rally up and breaking support of $150 led to Wyckoff last point of supply (LPSY). The confirmation of more distribution materialized as it Wyckoff sign of weakness (SOW) to the downside. The price gap down on 11 May 2022 and the spike of volume suggests it would be the Wyckoff selling climax (SC). The subsequent reaction is an automatic rally to hit $84 followed by a test to $46 on 13 Jun. This defined the temporary trading range.

The price attempted a rally to break the resistance at $84 on 4 Aug but was unable to commit above it and became Wyckoff upthrust (UT). The spike in volume suggests the presence of supply. Subsequently, the price retraced into range and was able to stay above $58. On 8 Nov, another large spike in volume and breaking of support at $58 hinted more weakness ahead. The price then drifted down in SOW to hit around $31.50 on 6 Jan 2023. It is important to note this leg down of SOW is more gradual than the one in May 2022 and with lower volume suggesting exhaustion of supply.

COIN started a significant Wyckoff sign of strength (SOS) rally to challenge the $84 resistance. However, the price was unable to stay committed and the rejection tails together with increased volume might lead to more sideway movements.    

Bias

Range bound. According to the Wyckoff method, COIN is still consolidating in a trading range. If the price is able to commit above $58 which is approximately the midpoint of the trading range, the chance of it rechallenging $84 and breaking above it would be higher.

If the price breaks below $58, it is likely to retest the support of $46 or even $31.50.

The improving market breadth together with many bullish trade entry setups could suggest a new bull run as discussed in the video below.