Over the past two months, the Coinbase share price has demonstrated resilience, bouncing twice from a horizontal support within the range of $47.7-$41. Looking at the daily chart, these reversals hint at the development of a prominent bullish reversal pattern, known as the double bottom. This pattern often signifies active accumulation from buyers, which may lead to a significant upswing in the near future.
The formation of a double bottom pattern has set the stage for a potential 42% rally for Coinbase shares. Additionally, a bullish divergence in the daily RSI slope emphasizes the rising buying pressure in the market. The recently reclaimed daily EMAs (20, 50, and 100) could also provide strong support in the event of a pullback.
Despite a massive gap down on June 5th, the Coinbase Global share price showed high demand pressure at $47.7-47, with the formation of a long-bullish candle. Over the last three weeks, the asset price has surged by 30.74%, reaching its current price of $61.47.
Driven by the double bottom pattern, the coin price seems poised for another 8% rise, potentially challenging the neckline resistance of $66.5. A successful breakout above this barrier would give traders a higher stepping stone to climb further.
With sustained buying, the post-breakout rally might push the asset price to $73 and subsequently, $87.6. Theoretically, the double bottom pattern projects a pre-determined target following the breakout of its neckline resistance. From the breakout point, the asset price is expected to rise by the same distance between the neckline and base support. Under favorable bullish conditions, the Coinbase share price could increase by 42%, reaching the $87.7 ceiling.
However, it’s crucial to take note of a few key indicators. The daily RSI slope has breached a month-long resistance trend line, indicating growing bullish momentum in the Coinbase share price. Conversely, the 200-day EMA wavering near the $66.5 neckline increases the resistance power of this barrier.
In conclusion, the Coinbase share price may be poised for an impressive rally, supported by the double bottom pattern and an optimistic market outlook. However, investors should also remain aware of the potential challenges posed by neckline resistance and EMA indicators. As always, thorough market research and a keen understanding of current market conditions are essential aspects of any successful investment strategy.
Source: Coingape
