Marathon Digital (NASDAQ: MARA) has seen its stock price continue its downward trend this week as Bitcoin resumed its sell-off. The share price dropped to a low of $7.85 on Thursday, a decrease of more than 60% from its highest level in September.
The stock’s movements are closely tied to Bitcoin’s price action. This is true for other Bitcoin mining stocks such as Riot Platform and BitDigital (BTBT), which tend to increase when BTC is in an uptrend and decrease when it is in a downtrend. This is because these companies make money by mining and selling Bitcoin on the open market, as well as holding substantial amounts of Bitcoin in their balance sheet.
Recently, Bitcoin has been in a period of consolidation, with its price jumping to over $28,000 at the beginning of the month before retreating to around $26,000. This should not be a cause for alarm, as it is still within the range it has been in for the past few months. However, traders should pay close attention to the low of $24,800 last month, as a volume-supported move below this level could indicate that there are still more shorts in the market.
The next important indicator for MARA stock will be the company’s earnings report, due on November 14th. Additionally, investors should keep an eye on Bitcoin prices and earnings from other Bitcoin mining stocks.
The stock’s technicals are also a cause for concern, with a death cross pattern forming on September 28th. This occurs when the 200-day and 50-day moving averages make a bearish crossover, and is an indication that the share price will continue to fall in the coming weeks.
