MARA, CLSK, RIOT stocks at risk as Bitcoin forms a risky pattern

Bitcoin mining stocks are under intense pressure as the BTC price continues its remarkable collapse. Marathon Digital (MARA) stock price dropped by more than 2.7% on Monday while Riot Platforms (RIOT) crashed by over 3.56%. Other mining companies like CleanSpark, Iris Energy, Hut 8 Group, and Bitfarms have also retreated.

Bitcoin has formed a risky pattern

The main catalyst or the ongoing sell-off is the ongoing Bitcoin plunge. Bitcoin has dived by over 17% from its highest point this year and is approaching the bear market. 

In most cases, Bitcoin mining companies tend to underperform the market when BTC is in a strong bearish trend. 

Bitcoin price chart

Sadly, there are signs that Bitcoin will continue falling in the coming weeks. As shown above, the coin has crashed below the 50-day and 100-day Exponential Moving Averages (EMA), meaning that bears are gaining control.

At the same time, Bitcoin has formed a triple-top pattern at $72,000 and whose neckline is at $56,463. In most periods, this is one of the most bearish signs in the market. Its bearish outlook will be confirmed if the price moves below the neckline at $56,463. If this happens, it means that Bitcoin could crash below the support at $50,000 soon.

If the bearish thesis works, it means that companies associated with the crypto industry will also continue falling. This explains why the MicroStrategy stock price has moved into a deep bear market, falling by over 31% from its highest point this year.

Similarly, Coinbase stock price has plummeted by over 23% from its highest level this year while Bakkt is down by over 74% from its highest level this year. 

Analysts expect Bitcoin price to rebound

Still, some analysts believe that Bitcoin will likely continue to bounce back in the coming months. Rekkt Finance, a well-known crypto analyst has cited several reasons why the coin will rebound.

First, he believes that the upcoming US election will be a positive thing for cryptocurrencies because Trump has vowed to be a supporter. Biden’s administration has also started to soften its stance on cryptocurrencies.

Second, he noted that the summer period is often characterized by low volumes and volatility. Finally, he pointed to the Federal Reserve, which could start cutting interest rates in the coming months.

Other central banks have started cutting interest rates. The European Central Bank (ECB), Swiss National Bank (SNB), Bank of Canada (BoC), and the Riksbank have already slashed their interest rates. 

https://x.com/rektfencer/status/1804632749929533951Therefore, if his prediction is correct, there is a likelihood that Bitcoin mining stocks will rebound. Another scenario is where these companies continue consolidating, as we have seen with Riot’s bid for Bitfarms and CoreWeave’s bid for Core Scientific.

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