Bitcoin price approaching critical support levels putting RIOT MARA and CLSK stocks in jeopardy
Bitcoin mining stocks such as Riot Platforms (RIOT), Marathon Digital (MARA), and CleanSpark (CLSK) experienced a decline in the pre-market session as BTC dipped. RIOT, MARA, and CLSK all fell by over 2%, while other crypto-related stocks like MicroStrategy (MSTR) and Coinbase (COIN) dropped by 1.5%.
The decline in crypto-linked stocks was due to Bitcoin resuming its downtrend on Wednesday. After reaching $63,750 on Monday, BTC is now hovering around $60,000, with uncertainty surrounding its potential rebound. Bitcoin is currently approaching a crucial support level at $58,273, which represents the 200-day Exponential Moving Average (EMA). If it falls below this level, the next support level is at $56,426, the lowest level seen in May.
The recent decline in Bitcoin’s price was triggered by a large deposit of nearly 2,000 Bitcoins to Binance in two separate transactions. Typically, such deposits occur when holders are exiting their positions. Additionally, the German government has been selling its Bitcoin holdings, transferring coins worth $52 million to exchanges on Tuesday. CoinGlass data shows that the volume of Bitcoin balances in exchanges has started to rise, reaching 2.49 million on Tuesday from last month’s low of 2.47 million.
The ongoing sell-off in Bitcoin poses a risk to Bitcoin mining companies such as Marathon, CleanSpark, and Riot Platforms, as these companies have historically had a close correlation with Bitcoin’s price. This decline comes a few months after the halving event, which reduced the amount of Bitcoins that miners receive. To offset this reduction, most of these companies have expanded their mining equipment. CleanSpark achieved a 20 EH/s hash rate, allowing it to mine 445 coins in June after mining 417 coins in the previous month. Marathon Digital mined 590 coins in June, experiencing a 40% drop from the same month in 2023 and remaining flat from May. Meanwhile, Riot Platforms has been focused on acquiring Bitfarms, a company that mined 189 coins in June.
Overall, the decline in Bitcoin’s price has had a significant impact on both the cryptocurrency market and Bitcoin mining companies, with uncertainty surrounding the future trajectory of BTC.
