Crypto Stocks: Coinbase, MicroStrategy pop as Bitcoin, Luna, Dogecoin and Ethereum try to bottom
- Crypto stocks continue to recover as Bitcoin holds above $20,000.
- Other cryptocurrencies also stabilize with DOGE and Ethereum possibly bottoming.
- COIN, MARA, MSTR all begin to recover.
Crypto stocks continue on the recovery path as the risk-off sentiment that hammered equity markets begins to ease. In fact, the crypto space held up reasonably well in this equity sell off with Bitcoin never breaking prior lows. This was possibly a decoupling with the Nasdaq and other high-duration equities (a fancy way of saying interest rate sensitive equities!). The Nasdaq and Bitcoin, for example, have been highly correlated this year, but the last equity sell-off was not accompanied by a fall in the Bitcoin price. Evidence of the relationship uncoupling would possibly be good news for the crypto space as valuations look challenging for Nasdaq-listed stocks as a whole.
Below we outline some possible bottom formations in Bitcoin, Ethereum and Dogecoin. Bitcoin is the most interesting with a triangle formation that could see a breakout. Thursday so far has seen Bitcoin rise above the key psychological level of $20,000, which could signal a larger risk-on move. The market's focus recently has improved due to some central banks slowing the pace of interest rate rises and pivoting to bond buying. Expectations for higher rates from the Federal Reserve have retreated lower, all of which is helping risk assets recover.
All this relative positivity has seen crypto stocks stabilize. Coinbase (COIN), Microstrategy (MSTR) and RIOT Blockchain (RIOT) stocks are up 13% in the past month, while Marathon digital (MARA) has advanced 18%. Compare this to the Nasdaq, which is down 4% from a month ago even including the recent sharp two-day rally.
Ethereum daily chart
Dogecoin daily chart
Bitcoin daily chart
Coinbase stock forecast
COIN stock is starting to look interesting with a triangle breakout pattern that could target the last major high at $116.30. As we can clearly see though, the downtrend for the year remains powerful, and it will be a difficult job convincing longer-term players to reenter.
COIN stock, daily
Microstrategy stock forecast
MSTR stock also putting in an attempt at a bottoming formation with key support at $200 and resistance at $267.
MSTR stock daily chart
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
