Analysis of the performance of Marathon digital stocks

[ad_1]

The price of bitcoin has fallen from all-time highs reached on November 10, 2021, and many publicly traded bitcoin mining stocks have seen their prices fall with it. Marathon Digital Holdings (MARA) was no exception to this rule.

Business growth

His last two earnings reports weren’t his best results, but Marathon has had a good year in 2021 overall. On January 3, 2022, Marathon released its updates for the year 2021 and December, including these notable highlights:

Accumulation of 3,197 self-mined bitcoins in FY2021 (846% year-over-year increase) Total bitcoin holdings increased to around 8,133 BTCR Total cash flow reached around 268.5 million dollars Addition of 72,495 ASIC miners in 2021 (the current mining fleet consists of 32,350 active miners producing approximately 3.5 exahashs per second [EH/s])

Source

Above is a bar graph of Marthon’s hash rate, his percentage of the global hash rate, and his forecast for 2022 and 2023. Marathon’s percentage decline from the global hash rate while increasing its own rate hash suggests that its competitors were expanding more aggressively than they were during this time. As Marathon continues to receive minors from its Bitmain deal, it may need to be more aggressive in its expansion efforts.

Marathon successfully built a new mining facility in Hardin, MT, which led to an increase in its hash rate from 0.2 EH / s in January 2021 to 3.5 EH / s in December 2021. Sa Next mining facility, slated for West Texas, will be ready for operation in the first quarter of 2022. If all builds follow schedule, Marathon will deploy all of its purchased miners by early 2023; the transaction would consist of 199,000 bitcoin miners, producing around 23.3 EH / s, making Marathon one of the largest publicly traded bitcoin miners in the world.

Analyze the MARA share price

Like many of its peers, the Marathon share price is closely tied to bitcoin prices. In March and April, both MARA and bitcoin hit new highs and when the price of bitcoin fell in April, so did the MARA stock.

In May and June, the MARA stock continued to evolve with the bitcoin movement: during the mining crackdown in China, the price of bitcoin fell below $ 33,000 and the MARA stock collapsed closely. by 40% during this period.

Those price movements did not end this summer – with the launch of two Bitcoin exchange-traded funds (ETFs), bitcoin hit a new all-time high and MARA followed suit. MARA is one of the only bitcoin adjacent stocks to hit a new all-time high when bitcoin did the same. This would suggest that the price of MARA is more directly correlated to the price of bitcoin than other stocks adjacent to bitcoin. It should be noted that while bitcoin has fallen by around 40% at the time of writing, MARA has fallen by almost 70% from its recent all-time high.

The main culprit behind MARA’s decline in the fourth quarter was a subpoena by the United States Securities and Exchange Commission (SEC), asking Marathon to produce documents regarding the construction and financing of the Hardin facility. On the day of this assignment, MARA shares fell 27%. Although nothing came out of this subpoena, the markets have delivered their verdict. This is the largest candlestick on the MARA daily chart and it will carry strong air resistance, but more on that later.

Source

Marathon will share fourth quarter earnings data in March. But looking back over the past three years does paint a picture of how far Marathon has come and how far there is yet to go.

Marathon’s third-quarter earnings missed projections of 0.65 due to its expansion efforts: building new facilities, buying miners from Bitmain and issuing new shares. These efforts, coupled with the company’s HODL strategy (effective October 2020), resulted in higher operating costs than the previous year. While revenues are growing steadily, positive signs suggest that once these expansion efforts are completed and revenues continue to grow as expansions continue, earnings per share (EPS) should correct and help make ride the title.

Source: TradingView

Looking at the daily chart for MARA, the stock has been in a strong bearish trend (blue line) since all-time highs were hit on November 10th. While this downtrend has been going on for over two months now, with some areas of support to come, we should see a break in this downtrend soon.

The importance of short term highs / lows, spreads, candlesticks and resistance are clues that have been left on a chart by the big pennies on Wall Street. Analyzing charts and their indices allows us to better judge how a stock will react in certain areas.

The chart below has shown the areas of support (red lines) and resistance (green lines). These areas of support and resistance can be used as markers for when to buy and when to sell stocks. An example strategy would be, if the volume decreases as the stock approaches a red support line, taking a position (buying stocks) as close to the support area as possible gives the trader more d space to let the action bounce back into a resistance zone. If the volume increased as we approach resistance and it breaks above, a new support area is created and this would become the minimum exit price once the shares start to move lower.

The colors signify where our expectations should be if these lines are broken – if the stock breaks below the red support line, we will likely continue lower, to the next support zone (and vice versa for resistance zones. ). I have listed the support and resistance areas with numbers corresponding to the row number on the chart.

Source: TradingView

Support This area is our first line of defense in the sand. These are last week’s lows that have yet to be broken, August’s bullish spread and confirmed support, and May’s bearish spread, which was previous resistance until mid-June. This is a confirmed support area that has not been tested since late July, resistance and bottom of the bullish gap in January, and bottom of the bearish gap and resistance in May end of July (this has not been tested and could be nothing, given its proximity to zone four). At least one of these will be support (potentially slightly higher, above 21 million and close to the close rather than the daily low) The $ 20 price point is a psychological number that should prove some level of support. It is also near the bottom of a bullish spread from January 2021. May low, which has not been tested

The main moving average lines that I like to pay attention to are all above the current price point. These moving averages are the 21-day exponential moving average (EMA, pink line), 50-day simple moving average (SMA, orange line), and 200-day simple moving average (white line) and will all be areas of resistance. in the future.

Lower since the large red candlestick last Wednesday. Due to its size relative to other nearby candlesticks and the higher volume of the day, there will be resistance somewhere inside this candlestick, and given the inability of the stock to close at Inside the body of the candlestick, the low of this candlestick quickly became resistance The middle of this candlestick corresponds to the short term low for December. It was also resistance in early July that triggered a massive and abrupt sell off for 13 consecutive trading days. The high of the candlestick matches the high for that July day that triggered the 13-day sell-off. This can be another example of just one of these areas being true resistance. The bottom of a bearish gap December 27-28. This is the same area where the 200-day SMA is currently located. The near-term high reached on December 27 was an unsuccessful attempt to break the 21-day EMA; the top of a bullish gap on Oct. 8-11, which was immediately tested as support. If MARA breaks higher, the momentum resulting from the rally from the $ 40 price level should force the action higher. Expectations of a further breakout would be close to 80% once the MARA breaks above $ 40. The next expected resistance zone is around $ 45: near-term high reached in September The price level of $ 50 is not far from the previous all-time high reached on February 17; The support zone for the last two weeks of November All final resistance zones are linked to the largest candlestick seen on November 15th (the date of the SEC assignment). This candlestick is about 25% in total. This gives a wide range for the stock to trade without going out of bounds. This is top notch real estate for options trading for those who are more focused on this style of trading.

Based on the current situation of the chart, there is no traditional chart pattern that has formed, which suggests that we are in a period of basic construction. The huge sale of tops is higher than most sales when building a base. The sell-off period during this base build period is above a healthy base, but given the volatility of MARA over the past two years, this is not unreasonable.

While there is no proper basis and MARA is under a huge downtrend, it is not a buy at this time. However, more aggressive investors may attempt to use the breakout of the downtrend line associated with the support and resistance areas to help set expectations for the trade.

[ad_2]