What's Next For This Bitcoin Mining Stock After 25% Surge?

Bit Digital Inc. BTBT shares are trading higher Tuesday after the company closed an $80 million private placement. The company closed its previously announced placement with institutional investors for the sale of 13,490,728 ordinary shares.

Bit Digital is engaged in the bitcoin mining business. Its mining platform operates with the primary intent of accumulating bitcoin which may sell for fiat currency from time to time depending on market conditions. With Bitcoin bouncing higher Tuesday, the stock is moving in sympathy.

Bit Digital was up 27% at $9.68 at publication time.

How Does Bitcoin Work?

Bit Digital Daily Chart Analysis

• Shares look to be breaking out of what technical traders call a falling wedge pattern. A few months ago the stock was able to break out of one of these patterns and saw a large bullish push.
• The stock has been falling and has been getting pinched between narrowing highs and lows. The stock could continue to push higher and break out.
• The stock is trading below both the 50-day moving average (green)& and the 200-day moving average (blue), indicating sentiment has been bearish.
• The stock may find resistance near either of these moving averages in the future.
• The Relative Strength Index (RSI) saw a jump the past few days and has pushed up to 49 on the indicator. This shows more buyers have moved into the stock causing the buying pressure to be relatively equal to the selling pressure.

What’s Next For Bit Digital?

Bullish traders are looking to see the stock continue to break out of the wedge pattern and repeat what happened last time the stock broke out of a wedge pattern. Last time, the stock saw a large upwards push for the next few days before falling back into another wedge pattern.

Bears would like to see the stock fall back down and start trading below the wedge pattern. If the stock falls below the pattern support in the pattern, it could be ready for a strong bearish move.