Coinbase, a leading cryptocurrency exchange platform, experienced a massive gap in its share price on June 6th. However, buyers found immediate support at $47.75-$46.2 and the coin price, COIN, quickly rebounded by 17.4%, hitting local resistance at $55.6. Using this level as a base support, the COIN price appears to be forming a double bottom pattern in the daily time frame chart. This bullish pattern may bolster market buyers to regain trend control, but will it be enough?
The formation of a double bottom pattern can indicate a potential recovery and trend reversal, signaling aggressive buyer accumulation at a particular support level. This famous bullish reversal pattern may result in a significant upswing upon breaking through its neckline resistance. However, a long-coming resistance trendline could potentially invalidate this bullish thesis.
At press time, the COIN price trades at $55.59 and struggles to breach the overhead resistance of $55.6. If it is influenced by the double bottom pattern, the price may rise another 18.5% to challenge the $66.3 neckline. To trigger the bullish pattern, a breakout above $66.3 with daily candle closing is required, and this could potentially push the Coinbase share price towards the $85.3 mark.
While the double bottom pattern suggests potential gradual growth for the Coinbase share price in the near future, the rallying prices may face multiple resistances, such as $55.6 and daily exponential moving averages (EMAs) of 20, 50, and 100, before reaching the key neckline resistance of $55.6. An upward breakout from this resistance could pave the way for further growth, potentially driving prices to the $66 mark.
The rising relative strength index (RSI) slope against the sideways price action provides an excellent confirmation of increasing bullish momentum for a potential rally. Meanwhile, the EMAs wavering just above the $66.3 barrier indicate that buyers might face multiple resistances on the upside.
As we can see, the bullish double bottom pattern suggests that the COIN price may be on track for a potential rebound and trend reversal. However, the presence of strong resistances could challenge this bullish thesis, and market participants should closely monitor the price action around these key levels. Remember, when investing in cryptocurrencies, always conduct thorough market research, as the author and the publication cannot hold responsibility for your personal financial losses.
Source: Coingape
