Monday Market Outlook #1
This first edition of Monday Market Outlook is sent out every Monday to our Premium Members, but has been made public to celebrate our launch.
This is going to be a big week for crypto.
Coinbase, the United States largest cryptocurrency exchange is set to go public via a direct listing on NASDAQ:COIN on Wednesday, April 14th. Regardless of analysts estimation of the initial valuation (some calling for $230 billion, others $19 billion) Coinbase marks a much more pivotal moment in the crypto industry.
Coinbase has drummed up a lot of interest on Wall Street with its mind-blowing 2021 Q1 earnings report which helps nullify the disadvantages of going the route of a DPO as opposed to the more traditional IPO.
Seems perfectly fitting to me for a company underpinned by a "stick it to the man" mantra.
This entire process serves as validation of the burgeoning cryptocurrency industry and will usher in previously cautious investors.
How does this affect us?
The Coinbase DPO could be a catalyst for newfound liquidity and bolster an already confident market into new heights. I think the major plays to watch post-offering, if it does indeed produce a massive liquidity event, are the following:
1. Coinbase listed altcoins ($ADA, $LTC, $ETH)
2. Exchange tokens ($BNB, $KCS, $FTX, $OKB)
3. DeFi Blue Chips ($SNX, $COMP, $UNI, $AAVE)
On the other hand, the DPO could be a bust which would drastically cut the current investor sentiment and likely see a market wide dip. Another scenario, that is likely to play out, is a massive turn-out followed by an immediate drop-off, similar to Facebook's IPO where the stock price fell nearly 50% in the following weeks.
Regardless of what happens, there is one thing that many investors overlook. Now that there is a tangible connection from Wall Street to crypto via the Coinbase stock price, expect there to be more correlations between crypto markets and traditional markets.
What's Bitcoin Doing?
Bitcoin has been holding auspiciously well in the 55k-60k range with extremely low volatility.
This shows that Bitcoin has significant demand at these prices and is establishing robust support around these levels. Funding is getting a little high which is usually indicative of an over-leveraged asset, but with spot demand keeping pace, this seems to be mitigated for now.
Two bullish patterns that are readily apparent to me is the inverse head and shoulders and the ascending triangle, both have equal targets to the $71,250 range.
In other Bitcoin related news, Grayscale is still attempting to launch their Bitcoin ETF, ($GBTC), which would be the world's second largest commodity ETF, under gold. A United States Bitcoin ETF would be monumental once the SEC rules in favor.
Look at the Canadian ETF for example, not only did it bring absolutely colossal volatility in the first few days, boasting more volume than the top 5 ETF's combined post-launch, but its also growing at a sustainable rate with more than 17,000 BTC in holdings.
My call is we go up from here and target $72,000 in the next few weeks ahead.