Monday, December 9, 2024

COIN Shows Monster Setup as Crypto Explodes Higher

Trade of the Day Wake-Up Watchlist

"When we see this kind of technical alignment during a strong fundamental cycle, the potential for explosive moves increases dramatically."

Nate Bear, Lead Technical Tactician, Monument Traders Alliance

Nate Bear

The crypto markets are absolutely on fire, and Coinbase (COIN) is presenting what could be one of the most explosive technical setups I've seen all year.

With Bitcoin recently shattering the historic $100K level - a milestone many thought impossible just a few years ago - COIN sits at a critical technical junction that demands immediate attention.

What makes this setup particularly compelling isn't just the crypto market tailwind.

We're seeing a rare confluence of technical factors that often precede significant moves:

  • A fresh squeeze signal triggering while testing 52-week highs
  • Perfect EMA stacking across multiple timeframes
  • Institutional accumulation patterns in the volume profile
  • Compression forming at a critical resistance level

As the leading crypto exchange platform in North America, COIN tends to move explosively when Bitcoin trends. But it's the technical setup right now that has my full attention.

 

The Weekly Foundation

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Trump During the 2016 Inauguration
 

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The longer-term chart reveals a powerful story of institutional positioning:

  • Weekly EMAs (8, 21, 34, 55) are perfectly stacked bullish, with each average trending higher below price - one of the strongest trending patterns possible
  • Price action showing controlled consolidation near 52-week highs, suggesting smart money accumulation
  • Volume patterns indicating institutions are quietly building positions
  • Remarkable YTD performance up 100%, demonstrating sustained buying pressure

The Daily Setup

The shorter timeframe adds even more conviction to our bullish thesis:

The Squeeze Signal

A fresh squeeze has triggered on the daily chart, and here's why that's significant:

  • A squeeze forms when volatility contracts (shown by red dots on my indicator) followed by an explosive release of energy
  • Like a spring coiling before release, this compression often precedes major moves
  • What makes this squeeze particularly powerful:
    • It's forming while price tests 52-week highs
    • Momentum indicators showing increasing bullish divergence
    • Each previous squeeze release has led to higher prices

EMA Stack Confirmation

  • Daily EMAs (8, 21, 34, 55) are perfectly aligned bullish, creating a strong support structure
  • Price consistently finding support at the 8 EMA on pullbacks, showing bulls maintain control
  • This type of pristine EMA stacking across both daily and weekly timeframes is rare and often precedes significant trending moves

When we see this level of technical alignment - multiple timeframe EMA stacking, a fresh squeeze signal, and price strength near highs - experienced traders know to pay close attention.

The setup suggests COIN could be preparing for its next leg higher as Bitcoin pushes past $100K.

Fundamental Catalyst

While our focus remains primarily technical, it's worth noting Bitcoin's recent surge toward $100K has created a powerful tailwind for COIN.

As the leading crypto exchange platform, Coinbase stands to benefit significantly from increased trading activity.

Your Action Plan

While I haven't entered COIN yet, this setup has all the ingredients I look for in a potential breakout trade.

With options premiums running hot, I'm specifically watching for an opportunity to grab some cheaper "lotto" calls for a quick momentum play.

What makes this particularly interesting is the perfect storm of technicals - a fresh squeeze ready to fire, beautifully stacked EMAs, and the broader crypto market strength.

These are exactly the conditions that can create explosive moves in options.

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Trump in office
Source: Wikimedia Commons

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