To The Moon

$Bitfarms Ltd.(BITF)$ have been experiencing selloffs in recent months, but with Bitcoin set to break new highs, this stock appear to be undervalued to me.

They have a total hash rate under management of 21.2 EH/s. In their Q3 results, it reported Bitcoin production was up 121% y/y, while adjusted EBITDA surged by 222%.

In this article, I will share why it is time to look at investing in this stocks as I foresee Bitfarms could take advantage of the Bitcoin price rise and start to increase their mining capabilities before the next Bitcoin halving.

Bitfarms (BITF) Seasonal Volatility by Day of Year

Historically, implied volatility for BITF tended to rise the most in January with a median IV Of 135.6, while June tended to be when implied volatility declined To its lowest levels With median IV Of 102.6.

Historically, the median IV for the current month of December was 125.1 compared to the current IV of 136.1. The IV level in January following December tended to be higher, with a median IV of 135.6.

This looks like a good month for BITF in terms of implied volatilty.

Bitfarms (BITF) Shareholder Returns

BITF exceeded the Canadian Software industry which returned 35.9% over the past year.

BITF exceeded the Canadian Market which returned -2% over the past year.

Bitfarms (BITF) Price Volatilty

In terms of stable share price, BITF is more volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 14% a week.

BITF's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of Canadian stocks in terms of volatility over time.

Bitfarms (BITF) Debt to Equity

In terms of debt levels, BITF has more cash than its total debt, this could be useful when it is time to plan to increase mining capacity. There will be more upside to Bitcoin as we get closer to the Bitcoin ETF approval.

BITF's debt to equity ratio has reduced from 5.7% to 3.5% over the past 5 years.

Technical Indicators - Simple Moving Average (SMA) - 50-day Moving Average (MA) period

BITF is currently trading above the 50-day MA period and I would expect it to stay above, or even trend higher.

We might see some pullback in Bitcoin prices but I do not think BITF will have much impact.

Technical Indicators - Average Directional Index (ADX)

BITF ADX is trending towards the 40 level in an upwards move, it is in developing trend. With +DI above -DI by wide margin, it should be trading in bullish upside.

There might be a chance for a Gap Up on one of these few trading days.

Technical Indicators - Relative Strength Index (RSI)

RSI is currently in overbought region and this shows that traders and investors are interested in buying this stock. There might be more LONG position for this stock as well.

I would be looking to take a position at the target price of around $1.70 to $ 1.75

Summary

Based on the data I have gathered, this might be a good time to take advantage of the undervalued price and it should be gaining as Bitcoin continue to rally.

The mining capacity of Crypto stocks miner would be in focus, BITF have a reasonable hash rate, but they have the cash to further expand this capacity.

Appreciate if you could share your thoughts in the comment section whether you think BITF is worth investing because of its undervalued price and Bitcoin rallying.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.