Bitcoin (BTC-USD) mining stocks did exactly what we thought they’d do after the April 20 halving event. They pushed higher just as they did in 2012, 2016 and in 2020.
Look at Marathon Digital (NASDAQ:MARA), for example.
On the day of the halving (April 19), MARA traded at $15.50. Weeks later, it was up to $22.82. Now at $18.69, it’s dropping because of Bitcoin’s pullback from $71,782 to a recent low of $60,227.
However, it appears the pullback in Bitcoin may be overdone.
Oversold at its 200-day moving average, the digital currency is also over-extended on RSI, MACD and Williams’ %R.
If you pull up a two-year chart of Bitcoin with those indicators, you’ll see that when all three become over-extended, BTC bounces back. We saw it happen in May, January, August 2023, March 2023, Nov. 2022 and Aug. 2022.
Expecting for Bitcoin to bounce back shortly, use recent weakness as an opportunity to buy some of the top Bitcoin mining stocks, including:
Marathon Digital (MARA)
The last time I highlighted opportunity in Marathon Digital, I said, “Over the last few days, shares of Marathon Digital fell from about $25 to $14.60. All thanks to Bitcoin’s pullback on Middle East tension. But you may want to use that weakness as an opportunity.”
That was on April 17. Shortly after, as mentioned above, it would rally to $22.82. Now back to $18.69, it’s again a buy on weakness.
Remember, as I also noted, “Historically, MARA has done well before and after the Bitcoin halving events. Look at the halving event on May 11, 2020, for example. Around that time, MARA had bottomed out at around $0.52. Heading into the event, MARA ran to $0.72. From there, it would hit $44.35. With the 2016 halving event on July 9, MARA traded at $30.77 ahead of it. Heading into the halving, it was up to $45. After, it would hit $48.48 a share.”
Riot Platforms (RIOT)
We can also look at top Bitcoin mining stocks like Riot Platforms (NASDAQ:RIOT).
In April I also argued that Riot Platforms was oversold at $8.16 and that it also had a strong history of rallying after halving events.
“Much like MARA, it also has a strong history of taking off with halving events. Ahead of the 2020 halving, RIOT was just bottoming out at around $0.95. By the halving, it was up to $1.70. It would then run to $52.73. Ahead of the 2016 halving, it was above $3. By December, it was up to $3.79,” I added.
With the April 19 halving, it from about $8.50 to a high of $12.13. Now at $9.21 support, weakness is an opportunity here, too. Now all we need is for Bitcoin to bottom out, and take Riot Platforms along for the ride again.
Potentially helping, analysts at Bernstein say Bitcoin could rally to $200,000 by 2025 and to $1 million by 2033 – which would easily catapult RIOT to higher highs. Unfortunately, saying Bitcoin will rally that high is easier said than done.
Hut 8 Mining (HUT)
On April 17, I also highlighted the opportunity in Hut 8 Mining (NASDAQ:HUT).
I added, “While it didn’t get to participate in the 2012 or 2016 halving events, having gone public on March 8, 2018, as we saw in the 2020 halving, Hut 8 had just bottomed out at around $2.94 ahead of the having on May 5. It would hit $7 on May 8. By the day of the halving on May 11, it traded at $5.55. From there, it would rally to $7.75.”
It would do even better with the latest halving. In fact, since our call on April 17, HUT ran from about $7.25 to a recent high of $12.53, where it’s still a strong buy. From here, I’d like to see HUT retest its prior high of about $18.50 short term.
HUT was also upgraded to a buy rating by analysts at Craig-Hallum Capital. The firm believes the potential for growth and stock appreciation outweigh the risks at this point.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
