Coinbase Stock Analysis as Citadel Predicts an S&P 500 Bull Run

Coinbase stock price dropped by over 4.4% today, April 7 as the US equities market plunged. Still, this retreat may be about to end as Citadel, and FundStrat’s Tom Lee predicted a major S&P 500 Index bull run.

Citadel and FundStrat Predicts S&P 500 Bull Run 

Some of the top players in Wall Street are predicting a strong comeback in the coming weeks. In a report to clients, Ken Griffin’s Citadel predicted a major S&P 500 Index bull run, citing the recent capitulation by retail investors.

Data released by the company showed that the retail cohort turned net sellers last week, a sign that they are starting to capitulate. In most cases, bull runs in the stock market normally start when this cohort turns bearish. The report showed that the S&P 500 Index has jumped by over 80% the last two times that this happened.

Similarly, Tom Lee, the founder of FundStrat, told CNBC that the risk-reward for the stock market was highly favorable. He predicted that the stock market would rebound when there are signs that the ongoing US-Iran war was ending.

A stock market rebound would be bullish for the Coinbase stock price because the company has entered the industry by offering tokenized equities on its platform. A rally would push more investors to start buying, which will boost its transaction revenue.

A stock market rally would also coincide with the rebound in cryptocurrencies since the two assets have a close correlation with each other. COIN stock thrives when Bitcoin and other altcoins are doing well.

Still, there could be some volatility in the coming days as the market waits to see whether Donald Trump will bomb Iranian infrastructure as he has promised. An escalation would push crude oil prices and inflation higher and push investors out of risky assets.

Coinbase stock has other bullish catalysts, including end recent launch of a prediction market and the ongoing USDC growth. The company benefits from USDC because of its minority stake in Circle and the fact that it takes all the interest it generates from the USDC in its platform.

Coinbase Stock Price Technical Analysis 

The three-day chart shows that the COIN stock price has slowly formed a highly bullish chart pattern, which may lead to a strong rebound in the near term. 

It has formed a triple-bottom pattern whose neckline is at $443. In this case, the bullish outlook will remain as long as the stock is above the triple-bottom, which connects the lowest swings in September 2024, April 2025, and February this year.

The Average Directional Index (ADX) has dropped to 23, a sign that the downtrend is losing momentum. Therefore, the stock may rebound, potentially to the key resistance level at $250 in the coming weeks.

A drop below the ascending trendline will invalidate the bearish outlook and point to more downside.