Key Takeaways:
- Some investors shorted Coinbase shares hours before news of the SEC lawsuit became public.
- COIN price rose 3% over the past 24 hours.
NEW DELHI (CoinChapter.com) — Speculations of insider training gained traction as some investors shorted Coinbase stocks just a few hours before the SEC lawsuit news hit the wire.
Unusual_whales, a platform that tracks stocks and crypto data, noted suspicious investor activity around COIN shares. Some investors opened $50 COIN weekly puts for $107,000 on June 6. The platform noted that the options were 19% OTM (Out of the money).
A put option is OTM when the underlying asset’s price exceeds the put’s strike price.
Later, when the SEC sued Coinbase, the put position exploded by over 2,570%, converting the investors’ $100,000 investment into millions. Unusual_whales suspected the traders likely knew about the SEC’s decision to sue the exchange.
Those positions are up big, nearly 2572%. They turned $100K to millions. Someone always knows.
Unusual_whales noted in a tweet
On the other hand, market sentiment remained mixed for Coinbase’s future. Some users believe that Coinbase is “DOA.”
Another crypto trader, StewpacShakur, called Coinbase’s response to the lawsuit “the less stupid version of Binance’s hilariously named “Tai Chi” plan.”
Moreover, StewpacShakur speculated that Coinbase would likely aim to either survive long enough to get the “Uber/Lyft treatment” or lose the lawsuit while making enough money “to still have a few bucks leftover after blowing up and be less loaded.“
Furthermore, the trader speculated that COIN might not survive the lawsuit.
However, some believe that the SEC’s tactics are shady and that Coinbase would likely recover from the setback unscathed. Additionally, Ark Invest’s Cathie Wood increased its holdings in Coinbase, stating she believed that Binance’s legal woes would likely benefit the rival exchange.
COIN Price Recovers Slightly
Meanwhile, COIN price recovered marginally after closing with a loss of 9% on June 5. On June 6, COIN started trading at $45.5, dropping nearly 20% from June 5’s close of $58.7 before closing the day with over 12% gains.
Also Read: Top 5 Crypto Market Villains of the Decade (Hint: One of Them is SEC Chairman)
The Coinbase stock price rebounded marginally on June 7, with the thin daily candle highlighting the market participants’ indecision. Moreover, COIN price was down by over 1.5% pre-market on June 8, before spiking 1.4% to a daily high of $53.1 after trading began.
A continued rally might see the Coinbase price rise to the resistance near $55.9. Breaking and consolidating above the immediate resistance might result in the COIN price rallying to the 50-day EMA (purple wave) and 100-day EMA (blue wave) resistance confluence near $60 before retreating.
Conversely, increased selling pressure could force COIN price to drop to support near $51. Failure of the immediate support level might result in the Coinbase shares price falling to the support near $44 before recovering.
The RSI for COIN remained neutral, clocking at 41.16 on the daily charts.
