Bitcoin mining stocks like Marathon Digital (MARA), Riot Platforms (RIOT), CleanSpark (CLSK), and Cipher Mining (CIFR) will be in the spotlight as BTC demand and price rises. Bitcoin has jumped to over $67,000 as animal spirits return in the market, pushing US, UK, Japan, and German stocks to a record high and the US dollar and VIX index down sharply.
Bitcoin Whale buys tokens
Bitcoin mining stocks do well when BTC is in a strong uptrend. Most of them like MARA, RIOT, CIFR, and CLSK jumped by double-digits last week as Bitcoin surged from $60,000 to over $67,000.
This trend may continue as signs show that there is still demand for Bitcoin. For example, data by LookOnchain shows that a whale bought 1,590 Bitcoins worth over $106 million from Binance on Saturday.
That purchase came a week after two whales bought coins worth over $49.8 million. It also happened as evidence showed that there was still strong demand for Bitcoins from spot ETFs.
The iShares Bitcoin Trust (IBIT) has over $18.7 billion in assets (276,756 coins) while Fidelity’s FBTC has over $9.7 billion. Other ETFs from companies like Ark Invest, Franklin Templeton, and Invesco have had inflows for two straight weeks.
All this is happening at a time when Bitcoin supplies in exchanges are falling. Data by CoinGlass shows that there are 1.72 coins in exchanges, down from this month’s high of 1.75 million and the all-time high of over 1.9 million.
The other likely catalyst for Bitcoin is that American stocks are soaring. The Dow Jones has jumped to over $40,000 for the first time on record. Similarly, the S&P 500 and Nasdaq 100 indices soared to all-time highs. Bitcoin has a close correlation with stocks, meaning that it has more upside.
This price action accelerated after the US published weak economic numbers, raising the possibility that the Fed will start cutting rates sooner. Inflation slipped for the first time in six months while key data like retail sales, manufacturing production, and building permits were weaker than expected.
Technically, Bitcoin has formed an inverse head and shoulders pattern on the 4H chart. In most cases, this is one of the most popular bullish signs in the market.
Bitcoin mining stocks outlook
Therefore, a bullish breakout for Bitcoin will be a good sign for Bitcoin mining stocks that have come under pressure recently after the halving event. Halving slashed Bitcoin’s block award by half, reducing the number of coins that they generate.
Recent data shows that the Bitcoin mining difficulty has jumped sharply in the past few weeks after halving. It recently soared to over 88.1T, its all-time high.
Therefore, Bitcoin mining companies have two ways to continue growing. First, they need to boost their investments in mining machines. Fortunately, most big companies have been growing their hash rate in the past few months.
Second, they need the price of Bitcoin to continue rising to offset the missed opportunity. Therefore, in this case, there is a possibility that these stocks will continue rallying this week as hopes that Bitcoin will jump back to $70,000 rise.
The most recent results showed that most mining companies had a strong quarter, helped by the Bitcoin gains. Cipher Mining’s Revenue jumped to over $48 million in Q1, up from $21.8 million in the same period in 2023. Its net profit was over $21 million.
Marathon Digital’s revenue soared to over $165 million while CleanSpark’s revenue rose to $111 million and its net income came in at $126 million.
