Watch These Coinbase Levels as Stock Soars on News of S&P 500 Inclusion

Coinbase (COIN) shares skyrocketed on Tuesday following news the cryptocurrency exchange will be added to the S&P 500. 

Coinbase, the largest crypto exchange in U.S., will replace Discover Financial Services (DFS) in the benchmark index before trading opens next Monday, marking a major milestone for the company, which went public in April 2021.

The inclusion comes less than a week after the company said that it had agreed to acquire Deribit, a crypto options exchange, for $2.9 billion in cash and stock, the same day it posted first-quarter earnings that came in below Wall Street expectations.

Coinbase shares jumped 24% on Tuesday to close at around $257. With that move, the stock has inched into positive territory for 2025, rebounding from an early-April low of around $142.

Below, we break down the technicals on the Coinbase chart and point out key price levels that investors will likely be watching.

Inverse Head and Shoulders Pattern Breakout

Coinbase shares forged an inverse head and shoulders pattern on the chart between March and May, with the price staging a decisive breakout above the formation’s neckline on Tuesday.

Even before today’s rally, the stock had registered higher-than-average volume over the previous three trading sessions, indicating that larger market participants had accumulated shares in preparation for a significant price move.

Let’s identify key overhead areas on the Coinbase chart to watch amid the potential for further upside and also locate a major support level worth monitoring during possible declines.

Key Overhead Areas to Watch

The $245 level was a key area to watch coming into Tuesday’s session as it was near two closely aligned troughs that formed on the chart in December and January.

With that level comfortably surpassed, shares could climb to the $273 level. Investors who have bought at lower prices may look to place sell orders in this region near a horizontal line the connects a range of peaks and troughs on the chart extending back to March last year. 

This level also corresponds with a measured move price target that calculates the depth of the inverse head and shoulders pattern in points and adds that amount to the formation’s neckline. For example, adding $65 to $208 projects a target of $273.

A more-bullish move higher may trigger a rally toward $330. This area on the chart could provide selling pressure near several peaks that developed on the chart just below the stock’s December high.

Major Support Level Worth Monitoring

During retracements in Coinbase shares, investors should monitor the $208 level. This location on the chart would likely attract buying interest on a retest of the inverse head and shoulders’ neckline, which may turn into a major support area after Tuesday’s breakout.

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As of the date this article was written, the author does not own any of the above securities.