Bitcoin mining shares have been in a downward pattern in recent days as concerns about cryptocurrencies have grown. Riot Platforms and Marathon Digital stocks have been under pressure as Bitcoin and other cryptos have pulled back. The RIOT shares were trading at $11.13 on Thursday, around 45% lower than their highest level this year, while MARA shares slipped to a low of $12.14, about 38% off their YTD high.
The recent Bitcoin and crypto retreat has been severe, with the leading cryptocurrency dropping from its YTD peak of $31,000 to $26,000. Furthermore, a death cross pattern is about to form on the daily chart, which usually leads to further losses.
On the other hand, the US Dollar Index (DXY) will soon form a golden cross pattern, indicating a possible rise in the coming weeks. Historically, Bitcoin and the US dollar have an inverse relationship. This movement is being fueled by investor expectations of a more hawkish Federal Reserve as American economic data has been better than expected, such as the services PMI in August.
Additionally, Bitcoin seems to be forming a bearish flag pattern, which is usually a bearish sign. If the bearish breakout is confirmed, the next support level could be $20,000, putting additional pressure on mining stocks like Riot Platforms, Marathon Digital, and Argo Blockchain.
The potential catalyst for Bitcoin could be a favorable decision from the SEC on a spot Bitcoin ETF.
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