Coinbase (COIN) stock price is about to surge, chart pattern shows

Coinbase (NASDAQ: COIN) stock price has been in a strong rally this year, helped by the strong performance of Bitcoin and other cryptocurrencies. The shares jumped to a high of $96.80, the highest point since July 14th. They have surged by almost 200% from the lowest level this year.

Coinbase, like other centralized and decentralized exchanges, does well when digital currencies are thriving. For example, the company’s revenue jumped to over $7.3 billion in 2021 as digital currencies jumped. It then retreated to over $3.14 billion in 2022 as these coins retreated.

Coinbase is benefiting directly as Bitcoin price rises since it holds the coin in its balance sheet. At the same time, a surge in BTC and other altcoins mean that more people are coming back to the industry.

Most importantly, Bitcoin has been selected by most companies as a custodian for the recently filed spot ETFs. This means that the company will serve firms like Blackrock, Invesco, and Franklin Templeton. Many Wall Street companies like State Street, Citi, and Bank of New York make billions as ETF custodians.

Coinbase also has a regulatory advantage over its global peers like Binance, OKX, and Huobi. For one, it is the biggest company that is regulated by the Securities and Exchange Commission (SEC) since it is publicly traded. Also, its books are audited by Deloitte, a big 4 auditing company.

Coinbase stock has more upside because of Bitcoin’s performance. In a statement this week, Cathie Wood, the founder of Ark Invest, said that Bitcoin would reach $600,000 in the next few years. Other experts like Michael Novogratz, Tom Lee, and Standard Chartered believe that the surge will continue.

Further, the Coinbase share price has formed an inverted head and shoulders pattern, which is usually a bullish sign. The stock remains above the 50-day and 200-day moving averages. Therefore, there is a likelihood that the stock will continue soaring in the coming months.

COIN chart by TradingView

There are other catalysts for Coinbase shares. For example, there is a likelihood that the Federal Reserve will leave interest rates unchanged and then cut them in 2024. Analysts at UBS expect several cuts in 2024.