The stock of cryptocurrency exchange Coinbase (NASDAQ: COIN) rallied 12% on Wednesday, January 4, with the equity attracting increased buying pressure.
In particular, as of January 5, Coinbase had a market capitalization of $8.56 billion, representing an inflow of about $1.1 billion from the January 3 value of $7.46 billion. COIN has had an impressive start to the year after the stock plunged across 2022, weighed down by the crypto market meltdown. The ability of Coinbase to contain extended losses in 2022 was further invalidated after the collapse of its competitor FTX.
Notably, Coinbase’s latest increase in the market cap can be attributed to the January 4 legal development where the company agreed on a settlement worth $100 million with the New York Department of Financial Services regarding compliance programs. Under the settlement, the crypto exchange will pay a $50 million fine alongside investing another $50 million into bolstering its compliance initiatives.
The regulators pointed out that it found “significant failures” in Coinbase’s compliance program that violated New York Banking Law regarding cryptocurrencies, money transmitting, transaction monitoring, and cybersecurity. Thus, the jump in Coinbase stock is likely due to investor confidence that the company has found some clarity on its regulatory outlook.
Coinbase stock analysis
As things stand, Coinbase is trading at $37.70 with daily gains of over 12%. Over the last month, COIN has been trading in the $31.83 – $46.65 range and is currently trading in the middle of this zone, so some resistance may be found above.
The equity will be hoping the crypto market in 2023 brings better fortunes considering in 2022; the share price exhibited a strong bearish trend.
Elsewhere, Coinbase’s technical analysis on TradingView offers mixed sentiments with a summary of the one-day gauges recommending ‘neutral’ at 10 while moving averages are for ‘sell’ at 9. The oscillator gauge points to ‘buy’ at 2.
Additionally, over the last three months, 20 Wall Street stock trading experts have shared their COIN price projections for the next 12 months.
According to the analysts, the average price target for Coinbase is $71.06, with a high forecast of $155.00 and a low forecast of $30.00. Notably, the average price target represents an 88.49% change from COIN’s price at the time of publishing.
Among the analysts, nine recommend buying the Coinbase shares; eight are for hold, while three are for selling.
What next for Coinbase?
Towards the end of 2022, Coinbase stock hit a new historical low facing multiple headwinds in the market. Generally, there is a close correlation between Coinbase stock and cryptocurrency prices. Therefore, as 2023 unfolds, a stock market recovery could mean bullish triggers for Coinbase.
At the same time, there is general optimism in the market about COIN’s recovery earning the trust of leading industry entities. For instance, at some point, Ark Invest, under the leadership of Bitcoin bull Cathie Wood, acquired 420,949 shares of COIN valued at around $21.4 million despite the market volatility. Furthermore, despite the market volatility, COIN remains among the notable Nasdaq shares to invest in January 2023.
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