• Tue. Aug 2nd, 2022

Bitcoin’s rebound is beautiful, but breakout is still expected

  • RIOT Blockchain (RIOT) barely budges on Wednesday.
  • BTC is getting closer to $ 60,000.
  • Nasdaq: RIOT underperformed the crypto sector on Wednesday.

Update October 14: Riot Blockchain Inc (NASDAQ: RIOT) is profiting from the recent rise in Bitcoin. The grandfather of cryptocurrencies is trading at around $ 57,500, and other digital assets like Ethereum, Ada, and XRP are also on the move. However, Thursday’s gains are capped at around 1% – interest-free compared to crypto movements. Additionally, RIOT is still down last month. A breakout is still pending, as explained below.

RIOT Blockchain stock rose a fairly modest 0.51% on Wednesday. We say a fairly modest increase, as some other names in the crypto sphere have risen sharply, following recent sharp increases in the price of Bitcoin and other cryptocurrencies. Bitcoin nearly returned to $ 60,000 and Marathon Digital (MARA) stock rose more than 7% on Wednesday. Bitcoin has been strong since Federal Reserve Chairman Jerome Powell said there were no plans to ban the cryptocurrency leader, and Bitcoin duly took the news and has risen sharply. It has remained high since with some setbacks. While many crypto names have rallied around or at least shown some volatility, RIOT looks oddly subdued. Is this gearing up for a big breakout? Or is it a failure and a bearish signal?

RIOT key statistics

Market capitalization $ 2.5 billion
Enterprise value $ 3.15 billion
Price / Benefits (P / E) 77

Price / Reservation

Price / Sales 89
Gross margin 46%
The net margin 45%
EBITDA $ 28 million
52 weeks high $ 79.5
52 weeks low $ 3.0757
Short interest 18%
Wall Street average rating and target price

Buy $ 54

RIOT Stock market news

On Tuesday of last week, October 5, RIOT released production figures for September. The number was strong with an annual production increase of 346%. In September 2021, RIOT Blockchain produced 406 BTC against 91 BTC in the same month a year earlier. As of September 30, 2021, RIOT reported holding approximately 3,534 BTC, all from its own mining operations. The company currently has 25,646 miners with a hash rate capacity of 2.6 exahash per second. RIOT aims to increase that figure to 7.7 exahash per second by Q4 2022. 3,534 Bitcoins at current prices are worth around $ 203 million.

One aspect that is often overlooked when it comes to Bitcoin miners is the price of the energy it costs to keep all this mining activity going. Energy costs are skyrocketing globally, which should have a knock-on effect on the costs of mining operations. Some miners have their own capacity to generate from renewable sources, it should be noted, but this is an overall consideration for the Bitcoin mining industry.

RIOT from its own website states, “Our self-mining operations are currently based at the facilities of Coinmint LLC in Massena, New York, where we have deployed a fleet of 16,146 next-generation Bitcoin mining ASICs. Coinmint’s facilities are located in Zone D of NYISO with a very low energy cost, thanks to an abundance of renewable energy production sources. Coinmint gets its energy from 88% zero emission sources. “

In May of this year, Riot announced the acquisition of Whinstone US, a site where it pays the insanely low cost of 2.5 cents per kWh.

RIOT Inventory Forecast

We had put RIOT on watch and got a 7% pop on Monday, but we didn’t get the follow-through we wanted. On the contrary, the stock has dropped all of those gains and more. In our opinion, this is a bearish sign, which does not hold onto gains. Our post-pop moment call: “A pullback after such a strong move is fine as long as RIOT stock stays above $ 26.50. RIOT erupted below on Wednesday, so where now?

Obviously, Bitcoin remains high which should put a floor below crypto stock prices in the near term. Wednesday saw a few loud pops from some in the area (MSTR and MARA), but others were calm in comparison like RIOT. There is still potential for a breakout, with stocks trading sideways since mid-September. Look for a strong move breaking the 9 and 21 day moving averages and confirmation of the Relative Strength Index (RSI) breaking the trendline.

FXStreet view: Neutral

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