Use Weakness in Marathon Digital Holdings Stock as Opportunity

MARA stock - Use Weakness in Marathon Digital Holdings Stock as Opportunity

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Cryptocurrency mining stocks, like Marathon Digital Holdings’ (NASDAQ:MARA) stock may not have the most attractive charts. However, that’s to be expected after Bitcoin (BTC-USD) corrected 17% since the start of April 2022. But don’t write MARA stock off just yet. For one, Bitcoin is exceptionally oversold, and could again test its 200-day moving average around $48,141. If that happens, I’d like to see MARA tag along for the ride, and retest $30.

Even better, the company expects to ramp-up its mining capacity over the next few months. At the moment, Marathon Digital’s existing mining fleet produces about 3.9 exahash a second (EH/s). It also increased its estimated hash rate from 13.3 EH/s by mid-2022 to 23.3 EH/s by 2023, according the company’s press release. In addition, as of April 2021, the company said it produced 1,258.6 Bitcoin during the first quarter, an increase of 556% year over year.

Helping even more, Marathon’s CEO said the company is open to being acquired. “I am always willing to talk but it’s got to be the right price,” CEO Fred Thiel said, as quoted by Bloomberg, “If somebody offers us a huge premium over our market cap, I have to take it under consideration and that may be the right thing to do for the investors.”

MARA Stock Is Technically Oversold

Technically speaking, MARA stock is oversold at support dating back to April 2021. It’s also over-extended on relative strength (RSI) and Williams’ %R.  In fact, every time RSI and W%R have become this oversold, MARA bounces back shortly after.

That said, I’d use weakness in Marathon Digital Holdings as an opportunity to buy. Not only is the cryptocurrency mining stock incredibly oversold, it’s quickly growing. From a current price of $20.67, I’d like to see it challenge $30 again, near-term. I strongly believe that can happen, especially with the price of Bitcoin also oversold.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.


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