Coinbase Rally Hits Resistance
Coinbase Global Inc.'s stock is moving higher after the SEC allowed tokenized stocks to trade in the U.S. The shares gained almost 12% on Friday and are now approaching a resistance level, which could cause the rally to end or pause.
The market psychology surrounding Coinbase's stock price movement is worth examining, as it has created both support and resistance levels. In February, a steep downtrend ended around $145, and a rally followed. Many investors who sold at this price later decided to buy back their shares at the same price they sold them for, creating support.
A similar scenario played out in June when the shares dropped back to $145. Remorseful sellers created support again by buying back their shares. This pattern of market psychology also occurred after the shares rallied and dropped back to $145 in August.
The mirror image occurs at resistance. In March, there was resistance around $215, which caused a selloff. Many investors who bought shares decided that doing so was a mistake and placed sell orders when the stock returned to this price in April. This created resistance again in May.