Coinbase IPO excitement spilling over into Bitcoin

Luke Suddards
Research Strategist
13 Apr 2021
Wednesday's listing of Coinbase helps the Crypto space continue its growing reputation of being a serious asset

Ahead of Coinbase’s direct listing on the Nasdaq this Wednesday, Bitcoin and Ethereum are pushing to new highs and taking the overall crypto market above $2 trillion on a market capitalization basis. To give some background on Coinbase, it is the leading cryptocurrency exchange in the US. It allows users to exchange up to 50 different cryptocurrencies and has a debit card feature for purchasing goods and services with cryptocurrency. Coinbase also offers cryptocurrency wallets to store the digital currency in a safe place (they’ve never been hacked). They have around 6.1 million active users. The price tag for the listing is around $100 billion, which is quite frothy. Looking at price action in Bitcoin, the excitement surrounding the listing is clearly helping see some buyers step in.

Bitcoin has been benefiting at the expense of gold as flow data indicates. Rising real yields are not good for the shiny yellow metal, but Bitcoin can produce high single digit yields in a crypto savings account. Therefore, in an environment of rising yields, Bitcoin becomes the more attractive option vs yieldless gold. A British Quant firm, Quant Insight Ltd. has also indicated through their research that Bitcoin is positively correlated with inflation breakevens, further cementing the idea that Bitcoin is being used as a hedge against runaway inflation/fiat debasement. With today’s US inflation data beating across the board, the inflation narrative is still in play.


Bitcoin had been moving sideways in a range between $55500 and $59500. Price bounced strongly off the range support and uptrend line and is now comfortably above range resistance of $59500 and taken out the March 14 highs of $61680.The RSI remains above the 48 support level, keeping the uptrend intact, but is now beginning to sniff close around overbought levels. To the upside $64/65k could be a good first initial target. However, if we some profit-taking then I’d look to the previous range resistance as support at $59500 and below that the 21-day EMA and uptrend line around $58k.

Ready to trade?

It's quick and easy to get started. Apply in minutes with our simple application process.

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients.

Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.