The Amazon stock price could be in for an interesting week as rumours swirl that the online retailer may soon accept payment in cryptocurrencies.
Amazon.com Inc (NASDAQ: AMZN) finished last week at $3,656.44, a gain of 2.32%.
This morning, the cryptocurrency market is alight with the revelation that Amazon is pushing forward with a plan to offer Bitcoin payment services to customers. The news has been a welcome boost for cryptocurrency investors, lifting BTC 13% to almost $40,000. But will it have the same effect on the Amazon stock price?
AMZN has been on a blistering run over the last year, and a 130% rally since March 2020 resulted in a record price of $3,773 being set on the 13th of this month. Although the stock wobbled recently as the COVID-19 delta variant briefly rattled markets, it rose each day last week, gaining almost 5% over the five days.
The stock remains a favourite amongst analysts, and last month investment bank Jefferies raised its Amazon stock price target to $4,200.
So, coming into this week with the Amazon stock just 3% off its ATH, investors will be keen to see how the stock reacts to this weekend’s news.
The daily chart shows Amazon has spent almost a year trading in a wide parallel channel between $2,900 and $3,500. Notably, after breaking out on the upside earlier this month, AMZN reversed into the channel.
However, last week impressive price action has again lifted Amazon stock outside of the range. This positive development should see the rally extend and test the high.
Although, it’s hard to predict how investors will view the firms’ push towards crypto adoption. While many could see it as a benefit, some traditional investors may be sceptical.
However, although an Amazon insider reportedly broke the news, there is no official statement from the retailer. And to that end, investors must take the report with a pinch of salt.
The price action is bullish as long as AMZN remain above $3,500. Therefore, should the price reverse back into the channel for a second time, the immediate positive outlook becomes invalid.
Follow Elliott on Twitter.
