- COIN looks ready to break higher from the chart.
- Crypto is back in focus as Bitcoin breaks $50,000.
- COIN ready to push above lifetime VWAP.
Crypto stocks are set to be back in focus once trading resumes after the long Labor Day weekend. The crypto king Bitcoin has finally broken back above $50,000 and held above there. El Salvador becomes the first country to officially have Bitcoin as its legal tender, so Bitcoin will definitely be in the headlines today. Below we can see the consolidation period followed by the eventual breakout, which looks to have been sustained.
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Following the IPO back in April, Coinbase shares trended steadily lower before finding support around the $210-230 range. The stock traded through this range for much of the summer in tandem with Bitcoin having a bit of a lull after its own sharp fall. Now with Bitcoin breaking $50,000, is COIN stock ready to recoup some of those post-IPO losses?
COIN key statistics
| Market Cap | $58.7 billion |
| Price/Earnings | 26 |
| Price/Sales | 41 |
| Price/Book | 55 |
| Enterprise Value | $50.4 billion |
| Gross Margin | 0.86 |
| Net Margin |
0.43 |
| 52 week high | $429.54 |
| 52 week low | $208 |
| Average Wall Street Rating and Price Target | Buy $385.95 |
COIN stock forecast
Certainly, Wall Street analysts remain bullish on COIN with the stock garnering an average Buy rating from the 22 analysts who cover the stock. They also have an average price target of nearly $386, so plenty of upside in relation to the current stock price. The main driver for the stock is the price of the underlying crypto currencies as this drives trading and volume to Coinbase. Ethereum has broken out in the past month, and Bitcoin looks to be as well, so these are definite positives for COIN.
COIN is currently sitting right on the Volume Weighted Average Price (VWAP) since the stock IPO'd. VWAP is basically exactly what it says on the tin – the average price accounting for volume, so an important indicator of equilibrium. The VWAP since IPO is $276.92. Breaking above puts COIN into a light volume zone with the volume profile bars dropping off, meaning gains are easier to sustain. $294 is the high from August 11. This is the post-earnings move. COIN reported earnings on August 10, and they beat estimates comfortably. Earnings per share (EPS) came in at $6.42 as against a $2.32 estimate. COIN stock moved up over 3% after results but quickly slipped back down to consolidate around $250-270. Now it looks to be breaking out of this range, but a break of $294 will confirm that. Once above here the next resistance is at $307, and breaking that opens the possibility of a move to $354.
The Relative Strength Index (RSI) has turned upwards but importantly remains a long way from being overbought. The Moving Average Convergence Divergence (MACD) has also turned higher and crossed into a bullish formation.
We are bullish above $270, neutral from $270 to $200 (a wide range) and bearish below. All of these levels though are dependant on what is happening in Bitcoin as that sets the trend for crypto stocks. For now, Bitcoin looks bullish, so all is well. If Bitcoin breaks below $50,000, we turn neutral on both COIN and Bitcoin.
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