The Setup for the Next Bull Run is Here

On the 6 ^th of June 2023, the U.S. Securities and Exchange Commission (SEC) filed charges against Coinbase for allegedly violating federal securities law. The SEC accused the company of operating an unregistered exchange and broker, similar to a previous lawsuit against Binance, another cryptocurrency exchange. In 2020, the SEC also initiated a lawsuit against Ripple, the company responsible for the XRP token, alleging their violation of securities laws.

However, last week, a U.S. judge ruled that the purchases of XRP tokens through exchanges were not considered securities transactions. This ruling was met with enthusiasm by the cryptocurrency community and exchange platforms, as it is believed to bring more clarity to regulatory matters. In response to the news, the price of XRP saw a significant surge of almost 100% on an intra-day basis, ultimately closing 73% higher. This sudden upward movement suggests a shift in the market sentiment and indicates the potential for higher price levels over the long-term.

The favourable court ruling on XRP has instilled confidence in Coinbase's legal case against the SEC and hopes that other cryptocurrencies may also avoid being classified as securities. Although the SEC maintains that most digital assets fall under this category. Nevertheless, the XRP decision has weakened the SEC's position on this matter.

Following the positive court outcome, Coinbase's shares experienced a sharp increase in value, benefiting from Ripple's partial victory and the resulting improved confidence within the crypto industry. Coinbase's leading market position and strong reputation have positioned it favourably in this context.

Coinbase's CEO, Brian Armstrong, has a scheduled meeting with Democrats from the House of Representatives behind closed doors to discuss various issues related to digital-asset legislation, taxation, national security, privacy, and climate.

Recent efforts by lawmakers from both the House and Senate have been made to introduce bills aimed at providing clarity in cryptocurrency regulation. However, given the division in Congress, the prospects for passing such legislation remain uncertain.

Despite the latest positive developments, Coinbase faces significant regulatory challenges. The company recently suspended its retail staking services in four states, as these services were deemed to represent securities.

Source: TradingView

The primary down trend has lost momentum over the past year and the price of Coinbase shares has been trading sideways, fluctuating between $31.55 and $116.30. While the current price action remains within the boundaries of its trading range, the leading Relative Strength Index indicator broke above its previous resistance and is firmly in its bull market range.

This suggests that it is a matter of when not if, key resistance of $116.30 would be broken upwards. Such potential breakout will have bullish implications for the price of Coinbase as it will confirm the prior primary down trend has reversed course, which would signal that higher price levels are likely in the months ahead. The potential upside price target based on the anticipated breakout is in the range between $155 and $180.

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