Bitfarms Ltd BITF gapped down 11% on Monday but shot up to completely fill the overhead range intraday on higher-than-average volume on lower timeframes. The Canada-based Bitcoin BTC/USD miner announced on Dec. 1 it had mined 339 Bitcoin during the month of November for a total of 3,089 coins mined during the first 11 months of 2021.
The cryptocurrency market has been pressured downward since both Bitcoin and Ethereum BTC/USD made new all-time highs of $69,000 and $4,867.81, respectively, on Nov. 10. Ethereum has also become stronger than Bitcoin, trading down just 14% off its all-time high compared to Bitcoin, which has declined almost 30% of its highs as of Monday.
Late Friday and into early Saturday, Bitcoin and Ethereum suffered a flash-crash where the two apex cryptos plummeted about 15% each between the hours of 11:45 p.m. EST and 12:30 a.m. before entering into deeply oversold territory on the 15-minute chart and subsequently bouncing.
Many mining stocks digested the crypto’s move lower with gap-down opens but if the dip continues to be bought Monday’s price action may be a sign a reversal to the upside is in the cards.
The Bitfarms Chart: After reaching a Nov. 10 high of $9.36, Bitfarms entered into a downtrend making consistent series of lower highs and lower lows on the daily chart. On Nov. 30, the stock printed a lower high at the $8.24 mark and then entered into a steep sell-off where Bitfarms didn’t print a lower low until Monday at the $5.31 level.
Bitfarms is now trading about 36% below its most recent lower high. If the stock continues higher over the course of the week traders will want to watch to see where the stock finds a temporary top and then wait to see if the pullback that takes place form’s a higher low above $5.31, which could indicate a trend change, or if Bitfarms then falls below the level, which would indicate the downtrend is still intact.
Bitfarms is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average (SMA), which indicates longer-term sentiment is bearish.
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- Bulls want to see sustained big bullish volume come in on Tuesday to drive the stock up above the 50-day SMA and then for momentum to give the stock enough power to regain the $6.74 level as support. Above the area, the stock has resistance at $7.68 and $8.39.
- Bears want to see big bearish volume come in and drop Bitfarms down to print another lower low. There is support below at $5.49 and at the $4.59 level.
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