Investing in Coinbase: Key Insights for 2022
Coinbase (COIN) shares are off to a strong start this year following a recent retracement. Since Donald Trump’s election win in early November, the stock has gained more than 30% amid optimism that his administration and a crypto-friendly Republican Congress will position the United States as a global cryptocurrency leader, creating a more favorable regulatory environment for exchanges like Coinbase.
Optimistic Outlook for Coinbase Looking ahead, the company also sits well positioned to benefit for increased trading activity, with Bitcoin (BTCUSD) still hovering just below the $100K level and other large-cap altcoins, such as Ethereum (ETHUSD) and Solana (SOLUSD), performing strongly since the election.
Technical Analysis of Coinbase Shares Coinbase shares set a new three-year high in early December, shortly after the 50-day moving average (MA) crossed above the 200-day MA to form a bullish golden cross signal. However, since that time, the stock has retraced about half of its post-election rally, with the price sitting roughly midway between the 200- and 50-day MAs.
Support and Resistance Levels Investors should watch key support levels on the Coinbase chart around $220 and $187, while also monitoring important resistance levels near $283 and $342. The first support level to watch sits around $220, just below the 200-day MA. If the shares move higher this month, investors should initially monitor the $283 level, a region on the chart where they could encounter selling pressure near the March peak, the mid-November retracement low, and the nearby 50-day MA.
Conclusion Investing in Coinbase can be a lucrative opportunity in 2022, given the positive outlook for the cryptocurrency market and the company’s strong position in the industry. By keeping an eye on key support and resistance levels, investors can make informed decisions about buying or selling Coinbase shares.
Source : www.investopedia.com