Experienced investor Peter Brandt raised concerns about the cryptocurrency exchange following his observation of a head and shoulders pattern.
Coinbase’s stock initially experienced a decline when the Securities and Exchange Commission (SEC) filed a lawsuit against cryptocurrency exchanges. However, it began to recover and rise in value following the submission of incoming applications for exchange-traded funds (ETFs).
Concerns Voiced by Investor Peter Brandt Regarding Coinbase Global (COIN) Stocks:
In a tweet, Peter Brandt identified a bearish pattern by stating “Heads and shoulders for Coinbase,” indicating his observation of a negative trend in the stock’s chart.
Head and shoulders in $COIN pic.twitter.com/6jySM1P7XF
— Peter Brandt (@PeterLBrandt) July 6, 2023
The head and shoulders pattern is characterized by three peaks, with the central peak (referred to as the “head”) being the highest, and the two outer peaks (called the “shoulders”) of similar height. This pattern appears along a baseline, known as the “neckline,” and is widely recognized as a dependable indicator of a potential trend reversal.
Although the head and shoulders pattern suggests a possible price decline, it is crucial to understand that this is only confirmed when the asset’s price falls below the neckline level.
For Coinbase, the emergence of this pattern may imply that the recent surge in the company’s shares, which was partly driven by BlackRock’s ETF application for Bitcoin, might not be sustained for an extended period.
Furthermore, the recent sale of 6,886,552 shares by Coinbase’s CEO and senior executives on July 6th seems to align with Peter Brandt’s concerns.
Coinbase shares have experienced a significant increase of over 30% since June 15, following BlackRock’s ETF application that involved Coinbase as a custodian. Nonetheless, the appearance of a head and shoulders pattern suggests the possibility of a price decline in the future.
While the head and shoulders pattern is generally seen as a dependable indicator, it is important to note that its accuracy is not guaranteed.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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