Coinbase (COIN) still needs to break $31.55 before looking for a rally

Coinbase Global, Inc., branded Coinbase (COIN), is an American company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work and the company lacks a physical headquarters. It is the largest cryptocurrency exchange in the United States by trading volume. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam.

COIN daily chart October 2022

In October last year, the structure of COIN that started from wave x in red, we changed it to a triple correction instead of a double correction. That was why we have labeled the high of 116.70 as wave ((XX)) and we needed to break the low of 40.72 to complete wave ((Z)) and wave (II) to look for the rally. At that time, we labeled wave (A) as a leading diagonal. Even if it would break much lower to complete wave (A), any rally would fail as wave (B). Then, it should look to break 40.72 to finish the whole cycle that started in 2021. This could reach the 23.00 – 30.00 area before continuing the rally.  (If you want to learn more about double correction or Elliott Wave Theory, follow these links: Elliott Wave Education and Elliott Wave Theory).

COIN daily chart March 2023

Currently, wave (A) continued lower than expected, breaking through $40.72 low. Confirming the bearish sequence. Wave (A) ended at $31.55 and bounced in 3 waves to complete wave (B) at $87.88. As we said, this wave had to fail in its intentions to resume the upward movement, and thus, it was strongly rejected by the market. It now needs to continue lower to break $31.55 to end wave (C) and the triple correction. This drop should be in a impulse structure, as shown on the chart, and it should reach the $17.00 – $10.00 area where we could look for buying opportunities. The worst case scenario is that COIN goes as low as $3.00. Only a break above $116.21 would suggest the end of the downtrend.