- Coinbase share price has formed a cup-and-handle pattern on the daily chart.
- The company is reacting to the latest Binance settlement with the SEC.
- Changpeng Zhao will resign as Binance CEO and pay a big fine.
Coinbase stock price held quite steady this week as investors focused on the ongoing Binance woes. The shares rose to a high of $106.20 on Tuesday, the highest point since July 20th. They have surged by over 52% from the lowest point in October.
Binance regulatory issues
The biggest crypto news of this week was the decision by Binance to settle with the Securities and Exchange Commission (SEC). The company and Changpeng Zhao pleaded guilty to the charges and agreed to pay a huge fine.
Changpeng, popularly known as CZ, will pay a $50 million fine and leave his post as the Chief Executive of the company. Binance will then pay over $4.2 billion to settle the charges against it.
The challenge for the company is that it is still facing legal scrutiny by the Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC). Therefore, by pleading guilty, it means that it will find it challenging to win the other cases.
The new developments are important for Coinbase stock for several reasons. First, the company could gain more customers as some of them decamp from Binance.
Second, and most importantly, the settlement could provide a roadmap of what to expect in its litigation with the SEC. It raises the possibility that the company will settle and end the ongoing litigation. Besides, it faces fewer charges than Binance.
Third, there is a challenge in the tokens that the company lists in its platform. The SEC views many of these tokens as financial securities. Therefore, if it pleads guilty, it could be forced to delist most of them. Also, its staking solutions could be impacted.
For Coinbase, however, a settlement will be in its best interests since it will remove the regulatory cloud that has existed in the past few months.
Nonetheless, the company has a few catalysts ahead, including the likelihood that the SEC will approve the proposed spot Bitcoin ETFs. Coinbase has been selected as the custodian of most of these funds.
Coinbase stock price forecast
The daily chart shows that the COIN share price has been in a strong bullish trend in the past few months. It has moved above the important resistance point on $86.52, the highest point in August, September, and November. The shares have jumped above the 50-day and 25-day Exponential Moving Averages (EMA).
Further, the Relative Strength Index (RSI) has moved to the overbought level. Further, the Stochastic Oscillator has continued rising and is in the overbought point of 80, signaling that it has a bullish momentum.
Coinbase stock price has formed a cup and handle pattern, which is a bullish sign. Therefore, the outlook for the shares is bullish, with the initial resistance point to watch being at $114.25, which is about 8.7% above the current level.
