The Unstoppable Rise of Coinbase: Navigating CyclesIntroduction: The Resilience of Coinbase NASDAQ:COIN
Originally, this article was slated for publication several months ago. We've been keen observers of the market dynamics from the beginning. Recently, there has been a significant downturn, yet for those who understand, this has not been a deterrent. Instead, it highlighted the efficacy of Dollar-Cost Averaging (DCA) in managing investments in less favorable market conditions, especially with robust stocks like Coinbase.
Why Coinbase Remains a Strong Bet Despite Bear Market Losses
Yes, it is true—Coinbase faced losses during the bear market phase. However, these setbacks are part and parcel of the cyclical nature of Bitcoin financial markets. Those who grasp this cyclical trend can continually assert themselves in the market. The entry of Blackrock during the 2022 bear market marked a significant turnaround, signaling a move to bring Bitcoin further into the Wall Street fold, a plan that was effectively executed.
The Predictive Power of Blockchain Technology
Interestingly, the history of cryptocurrency has shown that predictions about its growth and impact often come to fruition, not necessarily requiring substantial initial investments. The blocks, or the underlying technology of cryptocurrencies, show the path forward, reminiscent of the adage:
"First they ignore you, then they laugh at you, then they fight you, then you win."
A Focus on Technical Analysis Over Economic Forecasting
This article is dedicated to exploring Coinbase through technical analysis rather than economic forecasts, as the latter are highly dependent on market cycles. The chart mostly speaks for itself, indicating future directions based on historical data patterns.
Looking Ahead: Growth Projections for Q1 2024
As we look towards Q1 2024, growth revenue estimates are touted at $1.2 billion, with projections from Messari even more optimistic at a minimum of $1.5 billion. Our analysis suggests that these forecasts will be exceeded, driven by factors such as ETF trading and the launch of Coinbase's own Layer 2 solution on Ethereum via Optimism (Base). This platform is creating substantial volume and cash flow for Coinbase. It is expected to enhance significantly in the coming bullish phase as Coinbase directs users towards decentralized services through its wallet on the L2 chain.
The Emergence of Coinbase as a Market Leader
About the Bitcoin ETF, it has been clear from the start that Coinbase is poised to remain a dominant player. Most transactions are processed through Coinbase, establishing it as the hub of crypto and institution trading activities.
The Significance of Technical Chart Analysis
The overall assessment, similar to our observations with Microstrategy NASDAQ:MSTR and Marathon Digital Holdings NASDAQ:MARA , predicts a parabolic rise in Coinbase's stock price over the year. This is not just due to high short interest but also influenced by broader market conditions including anticipated downturns in the TVC:DXY DXY and oil prices NYMEX:CL1! , which could stimulate increased buying interest and potentially trigger a short squeeze.
Current Position and Future Targets
As of March, Coinbase encountered resistance at the $277-$290 range, known as the golden pocket. This is a typical market behavior indicating a minor corrective phase that now appears to be concluding. From here, we anticipate that Coinbase will rally in the coming months with immediate targets being the previous all-time high (ATH) at $429 and possibly reaching the 4.618 Fibonacci extension at $452. This would complete a significant phase in the market's cycle.
What Comes Next?
Following this anticipated third wave, a corrective fourth wave would ensue. Should we approach closer to the third wave, an update will be provided.
Long-term Vision in the Upcoming Bullish Season
Although still tentative, long-term targets are ambitiously set around the $2,000 mark, pending further clarity from future market behavior. We remain bullish and look forward to an exciting bullish season ahead.
