Coinbase Global, Inc COIN plunged over 12% lower on Wednesday, showing investor fear remains high after FTX filed for bankruptcy last week.
The news sent shockwaves through the crypto sector, and the full extent of the fallout isn’t yet clear. Coinbase believes the FTX debacle could cause the crypto winter to be extended toward the end of 2023.
“The recent market turbulence and absence of large buyers has left the asset class vulnerable, potentially extending an already long crypto winter,” the crypto exchange said in a report on Tuesday.
Coinbase broke bearishly down from a sideways pattern prior to the crypto sector taking a downward turn on Nov. 8 because the stock suffered a negative reaction to its Nov. 3 third-quarter earnings miss.
On Wednesday, Coinbase was reacting more bearishly than Bitcoin BTC/USD and Ethereum ETH/USD, which were sliding about 2% and 2.5%, respectively.
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The Coinbase Chart: Although Coinbase negated its downtrend on Nov. 11 by printing a higher low, the stock hasn’t yet confirmed a new uptrend. If Coinbase falls under the $44.62 mark over the next few days, the most recent higher low may serve as a bull trap and the downtrend could resume.
- Coinbase could also be forming a triangle pattern, which, paired with the 43% slide between Oct. 26 and Nov. 9, could be creating a bear flag on the chart. If the bear flag pattern is recognized and Coinbase breaks down from the lower ascending trendline of the triangle, the measured move suggests Coinbase could plunge toward $33.
- On Wednesday, Coinbase printed a bearish kicker candlestick on the daily chart, which could indicate lower prices and a break-down from the triangle is on the horizon. If Coinbase continues to hold within the triangle, the stock is set to meet the apex on Nov. 22, indicating a break up or down from the pattern is likely to come before that date.
- If Coinbase can break up from the triangle and regain support at the eight-day exponential moving average (EMA) the bear flag will be negated. If that happens, Coinbase may begin trading in an uptrend.
- Coinbase has resistance above at $50.34 and $60.99 and support below at $44.15 and $40.83.
See Also: Sam Bankman-Fried Is A ‘Criminal,’ Says Coinbase CEO, Calls Out Mainstream Media For ‘Puff Pieces’
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