Inverted Head & Shoulders with a Dash of Regulatory Uncertainty
Coinbase has had a wild ride following the deleveraging of the entire crypto industry as well as the flight retail investors in 2022. The COIN IPO was essentially the current ATH for the crypto market.
Over the past several months, price has ranged and consolidated in a potential inverted head and shoulders pattern. Hallmarks of the pattern include an extreme low flanked by equal higher lows and a rejection of higher highs at a horizontal level. This neckline is often used as the long entry signal for the trade idea.
As with all chart patterns, a continuous descending volume profile is preferred but not mandatory. A volume profile such as this does not eliminate the iH&S trade setup but does decrease the overall likelihood of the trade.
Entry: a breakout above the neckline, on volume (>$74)
Exit: measured move and fib extension based on the depth of the pattern ($120-140)
Additional Exit: yearly pivot
Stop Loss: any lower low below the current shoulder (<$46)
Additionally, high timeframe Ichimoku Cloud shows a pending Kumo breakout possible over the next several months. The Kijun also acts as a stop loss level for any active long.
Any resolution of the current SEC lawsuit favoring Coinbase should help propel prices higher. Any perceived weakening of the SEC or attitude shift in the SEC's position on crypto companies in the US should also provide a bullish lift.
Over the past several months, price has ranged and consolidated in a potential inverted head and shoulders pattern. Hallmarks of the pattern include an extreme low flanked by equal higher lows and a rejection of higher highs at a horizontal level. This neckline is often used as the long entry signal for the trade idea.
As with all chart patterns, a continuous descending volume profile is preferred but not mandatory. A volume profile such as this does not eliminate the iH&S trade setup but does decrease the overall likelihood of the trade.
Entry: a breakout above the neckline, on volume (>$74)
Exit: measured move and fib extension based on the depth of the pattern ($120-140)
Additional Exit: yearly pivot
Stop Loss: any lower low below the current shoulder (<$46)
Additionally, high timeframe Ichimoku Cloud shows a pending Kumo breakout possible over the next several months. The Kijun also acts as a stop loss level for any active long.
Any resolution of the current SEC lawsuit favoring Coinbase should help propel prices higher. Any perceived weakening of the SEC or attitude shift in the SEC's position on crypto companies in the US should also provide a bullish lift.
Comment:
o we sent it alright
- neckline breakout
- tapped yearly pivot