Why Aren’t Bitcoin Mining Stocks Going Up?

Why aren’t Bitcoin mining stocks going up, even as Bitcoin hits a new all time high? BTC mining stocks have been struggling over the past couple of weeks, with stocks like Marathon Digital and Cleanspark down over 20%. Despite some FUD in the market, the recent drop in Bitcoin mining stocks isn’t irrational or unfounded. There are some good reasons why the Bitcoin miners have been falling. It’s time to learn why BTC stocks have been falling, and more importantly to discover when Bitcoin stocks will recover. The latest crypto mining stock technical analysis and bitcoin analysis shows that Bitcoin should continue rise. And as the price of Bitcoin today continues to go up, the Bitcoin mining stocks should recover and start going back up again soon too.

There’s something weird going on with the crypto miners. Bitcoin just hit a new all time high hitting $72,000 earlier today, and yet the crypto miners are struggling. Marathon Digital was down 13% last week, and down another 14% this week. And Riot is hovering near the lows that it’s been at for the past couple of weeks. So what’s going on? Why aren’t the Bitcoin miners going up? Well, there are a couple of reasons for this. I’m going to explain all of the reasons why the Bitcoin miners are falling right now. And I’m going to go over some technical analysis to show you when these miners are going to bottom out and start going back up again. For those of you new to this channel, my name is Stock Curry. I’m a former Merrill Lynch and Morgan Stanley investment banker, and I have over 25 years of trading experience.

So let’s talk about the reasons why the Bitcoin miners are falling. But first, let me zoom out a little bit, because I think a lot of the fear that a lot of people have over the past couple of weeks is a little bit thrown out of proportion. After all, they say, when in doubt, zoom out. So let’s take a look at how these miners have actually performed over the past year.

Over the past year, Bitcoin is up 220%, with most of that coming in the last couple of weeks. And while Riot Platforms has lagged behind, up only 85% on the year, Marathon Digital has kept up with Bitcoin. It’s up over 200% on the year. And Cleanspark has far outperformed Bitcoin, up over 600% on the year. So even though the Bitcoin miners have fallen behind a little bit over the past couple of weeks, they’re still up massively for the year. And what you’ll notice is that while sometimes the Bitcoin miners will pull back on the short term, they typically vastly outperform bitcoin over the long term.

And this question of why aren’t the miners going up is kind of a new question. Nobody asked that back in January when Marathon Digital was up 200%, and yet Bitcoin was only up 100%. Nobody asked what was wrong with the miners when Cleanspark was up 400% and Bitcoin was only up 100%. This is really a new question that people have started asking over short term fears. And I get it. These past couple of weeks have not been fun. As somebody who owns these bitcoin miners myself, and has call options on them, these past couple of weeks with the bitcoin miners falling, they have been pretty painful. But it’s important to zoom out and understand that this is a short term drop in these miners. And they will most likely recover, and start going back up again, and start far outperform Bitcoin once again. So So even though the fears are certainly founded, they’re not unreasonable. It’s important to zoom out and lower those fears just a little bit.

So let’s talk about the reasons why these Bitcoin miners have been falling over the past couple of weeks. And we’ll start with Cleanspark, which caused a little bit of fear, uncertainty, and doubt to enter the market. In late February, Cleanspark insiders started selling quite a lot of shares. On the exact same day of February 27th, Zachary Bradford sold a little more than 10% of his shares, and Matthew Schultz sold a little bit more than 10% of his shares. And other officers have been selling as well. Whenever you see insiders sell shares of stock, you have to remember that there’s only one reason to buy, but there are a million reasons to sell. We don’t know why these insiders sold their stocks on February 27th. What we do know is tax season is coming up. They may have needed to sell the shares in order to pay taxes. We’ve seen Mark Zuckerberg and others sell shares in order to pay taxes before. It’s nothing concerning. But the fact that they sold is still causing a little bit of fear, uncertainty, and doubt to enter the market. And it’s one of the reasons that it is causing investors to sell off these stocks.

Now Marathon Digital has also added to some of the fear, uncertainty, and doubt. Marathon Digital recently announced new revenue streams such as Slipstream, as well as some ways to make money off of the heat that the Bitcoin miners produce. And this is causing some fear, uncertainty, and doubt about the profitability of these miners. The question is, “Why would Marathon Digital do this?” The largest Bitcoin miner. What is going on? Are they having profitability issues? Are they concerned that they’re not going to have enough profits after the Bitcoin halving, and so they have to diversify into other sources of income? Why is the biggest Bitcoin miner trying to seek other revenue sources? This is causing fear, uncertainty, and doubt among investors about the ability of these Bitcoin miners to produce profits in the future. And this is coming on top of Marathon Digital’s issues earlier, where in January, their hash rate was cut in half due to some technology and electrical issues that they were having at one of their plants. So Marathon Digital is clearly having some issues, and investors are wondering if these additional revenue streams are a sign that the issues are going to continue. And with this fear, uncertainty, and doubt setting in, this is also causing Bitcoin miners to partially sell off.

Now of course, the Bitcoin halving is also coming up. And with the Bitcoin halving, that means the profits from the Bitcoin miners are going to be cut in half. And that is also causing fear, uncertainty, and doubt. We’re not really sure what’s going to happen when Bitcoin miners profits get cut in half. The largest, most profitable, and successful companies, they will survive. But we do know that some companies are going to go out of business. And the Bitcoin miners that are unprofitable currently are the ones that are at the biggest risk of going out of business. Marathon Digital and Cleanspark are both profitable, but the other Bitcoin miners are not, and many of them might go out of business; they might get bought out by Marathon or Cleanspark. And with all of that uncertainty and doubt, not knowing who’s going to survive and who’s going to fail, this is also causing fear, and also causing the crypto miners in general to sell off. So these are all worries. But it doesn’t end there.

There’s other problems and factors in the market right now as well. Back in 2021, if you wanted to own Bitcoin stocks, your only options were MSTR or the Bitcoin miners. Today there’s strong competition from spot Bitcoin ETFs. And just in the last week alone, $2.7 billion of inflows came into the spot Bitcoin ETFs. In fact, spot Bitcoin ETFs are capturing 90% of all inflows of money into crypto stocks right now. Now that won’t last forever, especially as the price of Bitcoin continues to go up, but at least for right now, Bitcoin miners are out of favor with investors. In other words, investors sentiment is bearish towards the Bitcoin miners. Now in a minute here I’m going to go over the technical analysis. I’m going to show you when these miners are most likely going to bottom out and start going back up again. Just know that right now investor sentiment is bearish.

And if all of those weren’t enough reasons for crypto mining stocks to go down, we can thank Joe Biden for crashing crypto mining stocks on Monday, when he proposed a crypto mining tax for the 2025 budget. That mining tax would obviously lower the profits of crypto miners, and that’s why we saw crypto miners sell off so much on Monday. But this tax probably won’t be approved. Monday’s budget proposal isn’t the first time the Biden administration has sought to impose a mining excise tax. Last year’s budget proposal included similar provisions, although those proposed taxes were ultimately not taken up by Congress. Even though the crypto mining tax will probably not get approved, this is still another thing that’s adding to the fear, uncertainty, and doubt among the crypto mining stocks right now.

Now the other thing to keep in mind is the fact that these crypto mining stocks are businesses. They’re not just related to the price of Bitcoin. And one of the things you have to understand about the crypto mining business is that it is a very capital intensive business, meaning they have to borrow a lot of money in order to continue to grow and to remain profitable. And over the past year, the cost of borrowing has gone up significantly as the Federal Reserve has raised interest rates. Now the entire stock market, and the entire world, is waiting for the Federal Reserve to start cutting rates. And while the stock market was originally pricing in rate cuts in March, that now appears extremely unlikely.

And while interest rates remain high, the cost of capital remains high, which means the profits for the Bitcoin miners is going to be hurt. But once the Federal Reserve does start cutting interest rates, then the cost of capital is going to go down, and the profits for the Bitcoin miners is going to go up. So one thing that we’re still waiting on is to find out when the Federal Reserve is actually going to start cutting interest rates, and whether they’re going to do two interest rate cuts this year or three, as they had originally proposed. The market is still waiting to find that out. Once we get some clarity on that from the Federal Reserve next week at their FOMC meeting, then we might see the crypto miners start to go back up. Right now, inflation unfortunately remains higher than expected, so those rate cuts might come a little bit later than expected. And that is yet another thing that is adding to the uncertainty and doubt among crypto miners, and helping to push these crypto mining stocks further and further down.

Now, as these crypto mining stocks have gone down, we unfortunately have been hit with a little bit of pain from short sellers over the past couple of weeks. Short interest on CLSK has skyrocketed and has hit one of the highest points it’s been at in a couple of months. Unfortunately, as more and more people short CLSK, this pushes the price lower and lower. And short interest, unfortunately, is another thing that’s pushing the price of crypto mining stocks further and further down.

So those are all of the reasons why the crypto mining stocks are not going up right now, even though Bitcoin is hitting new all time highs. But what you probably are more interested in is, when are the crypto mining stocks going to bottom out and start going back up again? So let’s take a look at some technical analysis to try to figure out when they might start going back up.

Over the past couple of weeks, CLSK has had some pretty strong support at the 21 day EMA. It just so happened to have hit and bounced off of the 21 day EMA on Tuesday, so there’s at least some hope that CLSK might be bottoming out here, and might be ready to start going back up again. However, CLSK doesn’t hit very strong support until it hits the 100 day EMA, and the 100 day EMA is currently at $10.89. So it’s possible for CLSK to bounce here; that’s a strong probability. But if it continues to fall, it could fall as low as $11 before finally bottoming out.

Marathon Digital also has very strong support at the 100 day EMA, and Marathon Digital actually bounced off of the 100 day EMA on Tuesday. So there’s a very strong chance that Marathon Digital has, in fact, bottomed out here. Now, that doesn’t mean it’s necessarily going to start going back up right away. The last time Marathon Digital hit the 100 day EMA, it took about three weeks for Marathon Digital to actually start going back up again. So you might have to be a little bit patient with this one, but it does look like Marathon Digital has bottomed out.

When it comes to Riot, that is below all of the EMAs, so I had to draw a trend line of where Riot typically bottoms out at. And drawing this blue trend line, you can clearly see that Riot is now at the bottom of that trend line. So Riot also appears like it has bottomed out and will most likely go up from here.

So technical analysis shows that the crypto mining stocks have most likely bottomed out here and will start going back up over the next couple of weeks. However, it’s important to remember that it might take 2 or 3 weeks of trading flat and consolidation before we start seeing these stocks rise once again. Still, the technical analysis is in our favor, and it looks like a nice point to start buying in and accumulating these crypto mining stocks. But of course, technical analysis is never 100% guaranteed. There’s always a chance that these stocks could continue to fall. But if the technicals do hold up, then it does look like these crypto stocks have bottomed out, a will start going back up again.

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