Free Fall Crypto Miner Hut 8 As Bitcoin, Ethereum Continue To Behave Bearish: What’s Next?

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Hut 8 Mining Corp (NASDAQ: HUT) was trading down 8% at one point on Monday in sympathy with Bitcoin (CRYPTO: BTC), which attempted to regain a significant psychological level at $ 50,000 on Sunday but failed, with Ethereum (CRYPTO: ETH) falling below the $ 4,000 mark, confirming that a downtrend is in play.

The crypto mining sector has seen an overreaction to the downturn in the cryptocurrency market, with Hut 8 losing about half of its value since reaching an all-time high of $ 16.57 on November 9. By comparison, Bitcoin and Ethereum are trading down around 31% and 21%, since they hit their respective all-time highs of $ 69,000 and $ 4,867.81 on November 10.

While Hut 8 may see an oversold rebound in the near future, the stock could take a further drop if it cannot maintain a key level at $ 7.70. See also: What’s next for Bitcoin? Here’s what analysts are saying

The Hut 8: Hut 8 chart has been trading in a bearish channel since reaching its all-time high, creating a series of consistent highs and lows on the daily chart. The stock’s most recent low was printed on December 6 at the $ 7.95 level, and the most recent low was created at the $ 10.32 mark on December 7.

On Monday, Hut 8 almost tested the December 6 daily low as support and rebounded slightly. If the stock falls below the zone, this will confirm that the downtrend is still intact. The landing zone also coincides with the center line of the chute channel, which currently helps support Hut 8.

Hut 8’s Relative Strength Index (RSI) measures around 30%, indicating that a bounce may be in the cards. When a stock’s RSI approaches or falls below the level, it becomes oversold, which can be a buy signal for technical traders. When Hut 8’s RSI hit the same 30% level on December 6, the stock climbed around 30% over the next two trading days, allowing Hut 8 to print the higher lower that followed.

Hut 8 is trading below the eight- and 21-day Exponential Moving Averages (EMA), with an eight-day EMA trend below the 21-day, both of which are bearish indicators. The stock is also trading well below the 50-day simple moving average, indicating that long-term sentiment is bearish.

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The bulls want to see Hut 8 hold above and rebound from the $ 7.95 level which would create a bullish double bottom pattern. The stock has higher resistance at $ 8.82 and $ 9.63. Bears want to see big bearish volume come in and break Hut 8 to print a lower low and then for momentum to push the stock below the key $ 7.70 level, which it didn’t close one day. stock market lower since August 27. There is support below this level at $ 6.67 and $ 5.76.

Related Link: Will Bitcoin Mining Continue to Grow? This company thinks so

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