The cryptocurrency market is abuzz, and Coinbase stock (COIN) is riding the wave with a recent surge, hinting at potential gains if a breakout happens. On Monday, COIN soared by an impressive 8.47%, setting the stage for an even higher opening on Tuesday. However, the excitement was short-lived as selling pressure, coupled with a Bitcoin price drop, led to a 2.08% dip in COIN’s value.
Nevertheless, optimism surrounding COIN remains high, fueled by talk of Ethereum ETF approval.
Crypto analyst Snow breaks down the potential impact of an ETH ETF approval on Coinbase. Snow points out that Ethereum makes up a significant portion, around 15% to 25%, of Coinbase’s trading volume and revenues.
With Ethereum’s average price at about $2920 in Q1, Snow believes an ETF approval could boost both Ethereum and Bitcoin volumes, potentially boosting Coinbase’s Blockchain Rewards revenues, which hit $151M in Q1.
Legal and Demand Implications
Looking ahead, Snow raises concerns about possible legal challenges from the SEC for Coinbase post-ETF approval. Additionally, the approval could drive demand for Coinbase’s custodial services, especially considering the ETF’s expected assets under management (AUM).
Furthermore, Snow predicts that Ethereum’s rise could draw users and capital towards Coinbase’s ecosystem, including its stablecoin USDC. This influx could be a catalyst for increasing Coinbase’s transaction volumes and revenues.
As Coinbase stock breaks free from a downward trendline, there’s talk of a potential shift in momentum. However, this breakout isn’t confirmed yet, lacking significant upward movement. Therefore, investors are advised to watch the $239 level closely, as it could pose a challenge for further gains. If the breakout is confirmed, it could signal a highly positive trend, potentially pushing the stock price towards $300.
On the flip side, if there’s a correction from current levels, the $207 support level might provide some stability. Investors are encouraged to keep a close eye on these technical indicators to gauge Coinbase stock’s future direction.
Stay Optimistic but Cautious!
Despite the positive outlook, Coinbase stock’s fate is uncertain, influenced by market dynamics and speculation about Ethereum ETF approval.
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