- Crypto stocks surge on Monday as Bitcoin bounces hard.
- MARA stock jumps nearly 9% to $42.96.
- MARA stock has cash at the ready to invest further in mining operations.
Crypto stocks were where it was at on Monday with the usual names exploding higher. Bitcoin was on fire and heading for $60,000, showing continued strength after the rally last week. Fed Chair Powell had instigated the rally with comments that Bitcoin was not likely to be banned, and the move has created further momentum with FOMO (Fear Of Missing Out) traders entering the crypto leader and pushing it toward $60,000. FOMO is just a new word for momentum trading. Momentum had once been a dirty word in investing circles, but with the advent of behavioural economics it became more acceptable and mainstream. The key is to create that momentum, sustain it and ride the trend for as long as possible.
MARA stock forecast -637696283376578263.png)
Bitcoin versus MARA stock over the past month
Step 1 is achieved: show the strong correlation between the price of bitcoin and MARA stock. No argument there then!
Step 2: can this move continue? Looking at Bitcoin on the daily chart below, it is setting into some tough resistance around $60,000. The volume profile bars are increasing. $50,000 to $55,000 was light volume but now volume picks up from back in May. So the move may stall. If Bitcoin gets above $60,000, there is no volume resistance. Holding above $55,000 is key in our view.
Marathon Digital (MARA) stock is beholden to Bitcoin, but it does have the ability to move independently, especially when it takes steps to increase its mining capacity, etc. If the price of Bitcoin remains stable and MARA can mine more of it, then logic dictates that MARA should go higher, all else being equal and the costs of acquiring new mining rigs not becoming prohibitive. MARA stock has recently taken steps to do just that with the announcement of a $100 million credit facility with Silvergate Bank. We do not have details on the interest and repayment rates associated with this facility but must assume based on the price of Bitcoin remaining stable that increased mining capacity should add to MARA's bottom line and profits.
Technically, as we can see from the daily chart below, MARA staged a perfect bounce from the 200-day and 100-day moving average, as well as the yearly Volume Weighted Average Price (VWAP). All these combined at $30.55, the low from September. This remains strong support.
FXStreet View: bullish, neutral below $37, bearish below $30.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.