Bitcoin (BTC-USD), the largest cryptocurrency globally, is trading at $26,588 today. BTC has remained rangebound between $28,000 and $25,500 over the past month as the crypto market witnessed major regulatory approval.
The Securities and Exchange Commission (SEC) has moved against Coinbase (NASDAQ:COIN) and Binance, the two major crypto exchanges. the SEC has accused Binance and its CEO Changpeng Zhao of operating an illegal trading platform in the U.S. and misusing customers’ funds.
Subsequently, Binance paused its OTC trading portal. Now the company is shifting towards a cryptocurrency-only platform and is stopping USD deposits. Additionally, USD withdrawal will be paused around June 13.
Coinbase has been accused of operating its crypto trading platform as an unregistered national securities exchange, broker as well as a clearing agency. Consequently, shares of the company have tanked nearly 14% over the past five sessions while short interest in the stock still remains high at about 20.3%.
While Moody’s has revised its outlook on the company’s debt to negative from stable, Berenberg Bank’s Mark Palmer has reiterated a Hold rating on COIN stock while lowering the price target to $39 from $55.
Palmer believes the overhang from the SEC lawsuit could mean weakness in COIN’s trading volumes as also a decrease in the assets on its platform. At the same time, the analyst noted that “COIN is a crowded short” and shorting the shares outright could be a risky bet.
Amid this upheaval, one could expect major moves in the crypto space next week with the U.S. inflation print coming up on Tuesday followed by the Fed verdict on interest rates on Wednesday. Meanwhile, BTC remains firmly below its 50-day moving average and could test lower levels on any persistent bout of selling pressure over the next few sessions.
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