Coinbase (COIN) shares moved meaningfully higher on Sept. 18 as Bitcoin (BTCUSD) recovered sharply, hitting an intraday high of more than $81,000. As COIN rallied on a sharp crypto market rebound, it soared past its 20-day moving average (MA) today, indicating that bullish momentum could sustain in the near term.
Versus the start of this year, Coinbase stock is still down about 15%.
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www.barchart.comWhat’s Driving Bitcoin Price Higher?
Bitcoin’s rally past $80,000 on Friday was driven by a combination of renewed spot exchange-traded fund (ETF) demand, improving risk sentiment and a sharp wave of short covering.
U.S. spot Bitcoin ETFs recorded about $160 million in net inflows on Sept. 17, reversing two days of outflows and providing fresh buying pressure.
Additionally, BTC’s resilience following this week’s Fed rate hike and other macro developments encouraged traders to rebuild bullish positions.
The move accelerated as short sellers were forced to close positions, with more than $190 million in crypto shorts liquidated within an hour.
Regulatory developments and improving institutional participation also boosted sentiment, helping Bitcoin break through the psychologically important $80,000 level.
Is It Too Late to Invest in COIN Shares?
Despite today’s rally, Coinbase shares are trading at a huge discount to their 52-week high of over $400.
Plus, the options market sentiment remains largely bullish for the near term as well. According to Barchart, the put-to-call ratio on contracts expiring mid-October sits at 0.65x as of writing, with a reading below 1.00x typically interpreted as constructive.
And the upper price on those contracts is set at about $218, indicating potential for a nearly 12% rally over the next four weeks.
Investors should also note that Barchart itself now holds a “24% BUY” average opinion on the crypto stock, suggesting technical momentum is beginning to turn in its favor as well.
How Wall Street Recommends Playing Coinbase
On the flip side, some caution is warranted in buying COIN stock into the strength today; a smarter play instead would be to wait for a pullback.
Why? Because even though Wall Street firms have a consensus “Moderate Buy” rating on Coinbase, their mean price target of about $199 no longer signals meaningful upside potential from current levels.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.