- Riot Blockchain share price has been in a strong bearish trend.
- Bitcoin has formed a bearish pennant pattern on the daily chart.
- The outlook for the stock is bearish in the near term.
Riot Platforms stock price sell-off gained steam as investors priced in more downside for Bitcoin. The shares plunged to a low of $10.58, the lowest level since June 20th. It has plunged by more than 48% from its highest level in July, giving it a market cap of over $1.95 billion.
Bitcoin on the verge of a breakdown
Riot Platforms and other Bitcoin mining stocks like Argo Blockchain, Cipher Mining, and Marathon Digital sell-off continued this week. This decline accelerated after Bitcoin made a bearish breakout last week. At the time, it moved below the important support level at $29,000 to below $26,000.
In most periods, Bitcoin mining companies react to the price of BTC and other cryptocurrencies. For example, earlier this year, they were the best-performing companies in the Russell 2000 as Bitcoin surged to $32,000.
Therefore, by predicting the next Bitcoin price action, we can easily forecast what to expect with Riot Blockchain. Indeed, in my last article on mining stocks, I predicted that they would have a bearish breakout.
At the time, I noted that Bitcoin had formed a double-top pattern, one of the most popular bearish signs. This view was accurate as Bitcoin staged a strong breakout on Thursday and Friday.
Now, Bitcoin has formed another dangerous pattern. It has formed a bearish pennant pattern, which is usually a bearish sign. This pattern is characterized by a flag pole and a triangle flag-like pattern.
Therefore, if the sell-off happens, there is a likelihood that Riot Platforms stock price will drop in the coming weeks.
Riot is also facing other challenges. Like other unprofitable stocks, it is being stung by the rising bond yields. The 10-year and 30-year bond yields have soared to the highest level in more than a decade as investors predict more rate hikes.
Riot Platforms stock price forecast
The daily chart shows that the RIOT share price has been in a strong bearish trend in the past few weeks. This decline has flipped the important support at $14.41, the highest level on April 18th.
Riot shares have also fallen below the 100-day and 200-day exponential moving averages (EMA). It has also flipped the key support at $12/81, the highest level in May. The Relative Strength Index (RSI) and MACD have drifted downwards.
Therefore, there is a likelihood that the Riot Blockchain stock price will continue falling as sellers target the key support at $7.70.
