Coinbase Stock Price Forecast After the Huge New York Fine

Coinbase stock price surged by more than 6% on the second trading day of the year after the company was fined by New York Department of Financial Services. The stock jumped to a high of $36, which was a few points above last year’s low of $31.95. It has plunged by more than 85% in the past 12 months. 

Coinbase settles with New Yok regulators

Coinbase, the biggest crypto exchange in the United States, settled with the Departmnt of Financial Services. As part of the settlement, the company will pay $50 million to New York regulators. It will also be required to spend $50 million into its compliance systems in the next two years.

Coinbase was accused by the Department for not having enough controls to limit money laundering and other financial crimes in its ecosystem. In a statement, the firm said that it had boosted its investments in security and compliance in the past few years.

Coinbase stock price rose by more than 6% after the settlement was announced. Historically, stocks tend to rise when there is a major settlement since they are usually priced by the market. However, the settlement raises concerns that other exchanges could be investigated. The Securities and Exchange Commission (SEC) has been investigating Binance.

Coinbase stock price has been in a strong sell-off in the past few months as concerns about the industry remains. Like Binance, it has seen the amount of outflows increase in the past few months. Also, it has been hurt by the ongoing crypto crash. Bitcoin has plunged from near $70,000 to about $16,000 while the total market cap of all cryptocurrencies crashed by more than $2 trillion.

As a result, Wall Street analysts have downgraded the stock. Those at Barclays downgraded the stock to $37 while those of Piper Sandler, Mizuho, Bank of America, and Atlantic Securities slashed their outlook.

Coinbase stock price forecast

The daily chart shows that the Coinbase stock price has been in a strong sell-off in the past few months. This decline saw it crash below the important support level at $44.17, which was the previous all-time low. 

It has also moved below all moving averages while the Relative Strength Index (RSI) and Stochastic Oscillator pointed upwards. Therefore, I suspect that the shares will continue being turbulent in Q1 ahead of an eventual recovery later this year.