To The Moon

In this analysis, I'd like to delve into the recent price movements of Bitcoin miner stocks, particularly $Marathon Digital Holdings Inc(MARA)$, following the highly anticipated Bitcoin halving event.

Early in April, while Bitcoin itself enjoyed positive year-to-date performance, MARA was amidst a downtrend.

On 17 April, $CleanSpark, Inc.(CLSK)$ was up 37.13% YTD, Bitcoin was up 36.26% YTD, MARA was down 45.08% YTD and $Riot Platforms(RIOT)$ was down 48.28%. Note that this is a few days before Bitcoin Halving event that occured around 21 April.

Daily Chart on 17 April

This had since been the bottom until today (26 April). RIOT led the way with 51.94% gains, followed by CLSK with 30.97% gains, MARA with 30.38% gains and BTC with 5.25%.

Daily Chart on 26 April

So why did it bottomed and bounce to such level after halving? It is because I have entered the trade on 16 April. [Smart] 

Post from 17 April

Just kidding [LOL]  Let’s move on to the real stuffs.

MARA Daily Chart

I was looking to buy the dip as I was bullish on BTC long term and I feel that BTC going up will eventually lead to price increase in miners stocks. Even though there is a gap to fill at 13.70, I understand that not all gaps will get filled. With this in mind, I decided to open my position when it is trading within the supply range of 14-14.90.

MARA 20250117 30.0 CALL Chart

The recent Bitcoin halving, which cuts the number of new Bitcoins entering circulation in half, is a fundamental factor that could propel Bitcoin's price upwards in the long run. Analysts like Bernstein share this optimism, predicting a resumption of the bullish trend for Bitcoin after the hashrate adjusts.

Furthermore, strategic expansion plans by mining companies, exemplified by Riot Platforms' new facility launch, signal their confidence in a future with potentially higher Bitcoin prices. Additionally, miners holding significant Bitcoin reserves, like Marathon Digital, stand to benefit directly from price appreciation.

It's crucial to acknowledge the inherent risk associated with Bitcoin miner stocks – their prices tend to move in tandem with Bitcoin itself. A significant drop in Bitcoin's price would likely drag down miner stock prices as well. Bitcoin's current price consolidation phase presents a layer of uncertainty. While some interpret it as a bullish flag, others predict a potential fall. I leave further interpretation of these technical indicators to your discretion. If significant market volatility is unsettling, this might not be the right trade for you.

BTC Daily chart

Moving on, why I choose MARA instead of other bitcoin miners? This is because when I entered the trade, I was about to run my first half marathon. [LOL] 

Finisher Shirt and Medal on 21 April :)

Besides this, I had specific reasons for choosing MARA. As the biggest Bitcoin miner, MARA was positioned to be a frontrunner in a potential sector turnaround. I also hold a position in CleanSpark, another major player in the mining space. Another reason is a cup and handle formation, a bullish technical pattern, was identified in MARA's price chart.

2 Types Of Cup And Handle Pattern

The cup and handle chart pattern is special because:

• It's mostly bullish: Unlike some patterns, cup and handle is almost always used to predict a price increase.

• It can be reversal or continuation: While many consider it a reversal pattern, it can also signal a continuation of an existing uptrend.

The key takeaway is that the cup and handle's shape is the same regardless of reversal or continuation, and traders can use it the same way in either scenario. But remember, the context (uptrend or downtrend before the pattern) is crucial for interpretation.

Examples of continuation is $SPDR Gold Shares(GLD)$ and $Micron Technology(MU)$. I talked about Gold’s cup and handle as early as 2021.

GLD 1M chart on 30 May 2021

GLD Weekly Chart on 26 April 2024

My trade to profit from gold's breakout

I talked about MU’s cup and handle last year.

MU 6M Chart on 5 August 2023

MU 6M Chart on 26 April 2024

My trade to profit from MU's breakout

My trade to profit from MU's breakout

Now, I present to you MARA.

MARA Weekly Chart

Cup And Handle Price Pattern 1

For MARA, it is a reversal cup and handle. The textbook interpretation of the cup and handle pattern suggests further consolidation before a potential price surge. With this in mind, I recommend DCA during this phase. This allows for accumulating shares at different price points, potentially averaging out the cost per share. Once the price breaks out, a more conservative approach might be prudent.

Personally, I have entered some positions. I believe it is a good idea to buy in small amounts of MARA. This measured approach limits your downside risk while allowing me to participate in the potential upside if the pattern plays out.

MARA 20250117 30.0 CALL

CLSK 20250117 30.0 CALL

MARA 20250117 35.0 CALL

With that said, this is more of a speculation than actual investment. Happy trading!

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Disclaimer: This post reflects my personal opinions and should not be considered as financial advice. Always conduct thorough research before making any investment decisions.