BitMine Immersion Technologies, known for its Ethereum-focused investments, is going through a risky period due to the recent accelerated loss of value. The company is facing serious losses in its portfolio, which consists mostly of Ethereum.
Cost Based Losses and Technical Signals
BitMine’s total investment amount reached approximately $15 billion as of last February. However, the current value of the portfolio decreased to 7.7 billion dollars. This decline indicates a 49 percent loss in the company’s investments. On the Ethereum side, prices are around $1,950, while the average purchase price of Ethereum in BitMine’s portfolio is $3,850. ETH prices are trading 50 percent below this level, and a significant portion of the company’s assets remain at a loss.
Confidence of Big Investors Is Weakening
Technical analysis indicators also reveal that the situation is challenging. On the daily chart from November 18 to February 9, the price formed lower highs, while the relative strength index (RSI) developed higher highs. This is a situation known as “hidden negative divergence” in technical analysis and indicates that selling pressure may increase. Chaikin Money Flow (CMF) data showing fund flows shows that despite the last 26-year rise, the main trend is still towards large investor outflows. The CMF failed to stay strong above the zero level and this metric did not translate into a clear signal of support from large investors.
Moving averages also provide a warning picture. The 100-day exponential moving average (EMA) is approaching the 200-day EMA; Previously, BMNR stock lost more than 44 percent following a “death crossover” in which the 50-day EMA broke below that level. The formation of a new intersection may increase selling pressure. Additionally, the correlation between Ethereum and BMNR is close to 0.5. This shows that the weak course in ETH may put direct pressure on the stock.
Critical Support Levels and Potential Risks
The closest support in the company’s share price is around $17. This level is slightly above current prices and has been operating as a bottom zone lately. It is predicted that sales may accelerate if the price falls below 17 dollars. The next support below this is positioned at $15. In case of extreme decline, around $11 is watched as another important support point according to Fibonacci retracement levels. If this level is approached, it is possible to see an additional decline of up to 40 percent in the stock from current prices.
In upward movements, prices must rise above the 21 dollar level in order to achieve recovery. $21 has been an important resistance point in the past. However, it is stated that in order for this to happen, a new institutional demand may be required along with a strengthening in Ethereum prices.
Ethereum’s current price is well behind BitMine’s average purchase cost. Combined with the deep loss in the company’s portfolio and the weakness in fund flows, increases in prices may encounter strong sales in the short term.
