Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- The New York attorney general filed a lawsuit against Kucoin.
- Kucoin’s price action broke below key support after the news of the lawsuit.
Kucoin exchange’s native token, Kucoin [KCS], could face increased selling pressure amidst the current lawsuit. New York’s attorney general, Letitia James, has shifted focus to the exchange as part of her spirited crackdown on unregistered cryptocurrency platforms.
On 9 March, the AG filed an official lawsuit against KuCoin for failing to register as a broker or dealer besides “incorrectly” presenting itself as an exchange.
Read Kucoin’s [KCS] Price Prediction 2023-24
At press time, KCS had breached a key $8.123 support that could attract more aggressive selling and offer more shorting opportunities at certain levels should bearish sentiment persists.
Can bears enjoy more opportunities?
In mid-January, KCS consolidated between the $7.519 – $8.123 range. It flipped the structure into bullish at the end of January before facing a price rejection at $8.894. But the $7.841 checked the drop and offer a strong recovery around mid-February, leading to a new high of $9.192.
At the time of writing, KCS had broken key support levels, including a crucial one at $8.123 that could induce bears to act more aggressively. Therefore, the price action could retest $7.841 or breach it and move south to other support levels.
Bears could be presented with two possible trade outcomes. First, shorting the token with a target of $7.841 and a stop loss above $8.123.
The second option is targeting the lower support level of $7.519 if bears clear the hurdles at $7.841 and $7.682. The second option has a higher RR than the first.
Alternatively, bulls could dent the bearish sentiment if they defend $8.123 through a daily candlestick close above the level. But bulls must clear the hurdles at 200-day EMA ($8.347) and 26-day EMA ($8.511) to gain leverage.
Is your portfolio green? Check out KCS Profit Calculator
The RSI (Relative Strength Index) slid into the oversold territory while the OBV (On Balance Volume) showed a downtick, indicating selling pressure increased amidst declining trading volumes.
KCS saw a recent sharp spike in exchange outflow despite the negative sentiment
KCS recorded a recent spike in exchange outflow, showing short-term accumulation of the token at its previous low price level. In addition, a drop in supply on exchanges on 7 March confirmed the short-term accumulation.
However, the weighted sentiment was negative at press time and could see a round of offloading after the news of the lawsuit if investors sell off at a loss.