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Shares in Nasdaq-Blisted Cryptococurrency Exchange Coinbase (COIN) is rapidly approaching the threshold of overvaluation, 10x researchLeaded by Markus Thielen, he said on Friday. Thielen recommends a pair of trade that includes a short position in the coin and the current long position in Bitcoin
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In the note sent to Thielen clients, he explained that the foundations of Coinbase, especially trading volumes, did not follow the pace with the rally in stocks, which is rapidly approaching over -evaluation, the classic setting for “tactical conversion”.
“While Coinbase has not completely violated the overvaluation of +30%, it approaches quickly and, although one of the few high -quality, cryptological games mentioned above, its current bonus indicates the risk of insufficient power forward,” Thielen describes in detail. “Traders who want to earn this dislocation could consider long bitcoins when shortening Coinbase or by means of selling coins and buying BTC calls to express the same view with a defined risk.”
Disconnection
According to the linear regression model 10x, 75% of shares of Coinbase shares are explained by the price and trading of bitcoins. This means that only 25% of Coin price action is led by other factors, such as the potential impact of IPO Circle or American crypto and macro development.
From a quantitative point of view, this suggests that the price of COIN tends to increase by $ 20 for every $ 10,000 in BTC AO $ 24 for an increase in business volume by $ 100 billion.
The recent price event suggests that the assembly is over -widespread compared to the price and trading of bitcoins. Shares in Coinbase have increased by 84%over the last two months, while bitcoins increased by only 14%.
“Not only is this bonus stretched compared to the current price of bitcoins, it also seems to be disconnected from the underlying volumes of crypt trading, which is around $ 108 billion,” Thielen said. “This rare deviation suggests that the valuation of Coinbase is expanded and vulnerable to the average reverse.”
The report said that other factors – Circle IPO 3.
“As this momentum cools down, obvious in recent conversion of Circle, Kakaopay and Metaplanet, there is a risk that Coinbase shares could also close to the local peak,” Thielen said.
