Argo Blockchain (ARB) share price moved sideways this week even after the company published encouraging financial results. The stock was trading at 11.20p on Thursday, down from this week’s high of 13p. It has crashed by almost 80% from its highest level this year.
Argo Blockchain’s earnings
The Argo Blockchain stock price continued falling after the company published its financial results for 2023. In a statement, the company said that its net loss came in at over $35 million in 2023. That figure was much smaller than the $228 million that it lost a year earlier.
That’s where the good news ends as the financial report had many red flags. First, the company’s mining revenue dropped from $58.4 million in 2022 to over $50.8 million. This happened even as the price of Bitcoin soared from less than $20,000 in December 2022 to over $60,000.
The sharp decline in revenue happened as the number of mined coins dropped. It mined 2,156 coins in 2022 to 1,760 in December. That is a red flag for the company considering that Bitcoin recently implemented its halving event, which will increase the mining difficulty.
Argo Blockchain noted that the average network difficulty rose by 33% in 2023 to over 40.4. Therefore, there is a likelihood that the difficulty will continue rising in the coming months.
Argo Blockchain has made several measures to boost its Bitcoin production. For example, the company deployed 2,750 BlockMiner machines from ePIC Blockchian Technologies last year. However, the number of coins it mines has not grown substantially. The most recent results showed that the network mined 3.3 coins per day.
Therefore, I believe that Argo Blockchain is still one of the weakest mining companies after the halving event. It has weak daily production and its energy costs are substantially higher than other companies like Riot, Cipher Mining, and CleanSpark.
Argo Blockchain share price forecast
The daily chart shows that the ARB stock price has moved sideways in the past few weeks. It has plunged from the year-to-date high of 36.15p to a low of 11.20. The stock has moved below the 50-day and 100-day Exponential Moving Averages (EMA).
It has also formed a bearish pennant pattern, which is shown in blue. In most cases, this pattern is one of the most negative signs in the market. The Relative Strength Index (RSI) has remained below the neutral point at 50.
Therefore, the outlook for the stock is extremely bearish, with the next important level to watch being at 5.88, its lowest point in June last year.
