Hut 8 Mining Stock Heads For Breakout As Bitcoin, Ethereum Move Higher

Hut 8 Mining Corp HUT was trading up about 7% at one point on Wednesday in response to Bitcoin BTC/USD and Ethereum ETH/USD, which were trading up about 3% and 2% higher, respectively.

The Canadian-based company, which specializes in Bitcoin and Ethereum mining, has followed Bitcoin’s price action more closely than Ethereum’s by trading in a falling channel off all-time highs. On Wednesday, both Bitcoin and Hut 8 were printing inside bar patterns on the daily chart, which indicates consolidation and whether Hut Mining breaks up bullishly or bearishly from the pattern will likely be determined by Bitcoin’s next move.

See Also: Can Ethereum's Record Outperformance Against Bitcoin Send It To A New High Today?

The Hut Mining Chart: Hut 8 made a Nov. 9 all-time high of $16.57 and then fell into a downtrend making a consistent series of lower highs and higher lows. The downtrend has printed between two parallel lines, which sets the stock into a falling channel pattern. The falling channel is considered bearish until a stock breaks up from the top descending trendline of the pattern on high volume.

The downtrend may be set to end, however, because on Nov. 26 and Nov. 30 Hut 8 printed a double bottom pattern at the $11.70 level and on Wednesday opened higher. At 11 a.m. EST, the stock attempted to break up bullishly from the pattern but immediately ran into a group of sellers who knocked it back under the upper trendline.

Hut 8 may need a further period of consolidation before attempting another bullish break from the falling channel, which is indicated the inside bar pattern. If the stock breaks up from the pattern, it will then need to rise up over Tuesday’s high-of-day at the $13.15 level to break the inside bar pattern bullishly.

Hut 8 is trading slightly above the eight-day exponential moving average (EMA) but below the 21-day EMA, with the eight-day EMA trending below the 21-day, which indicates indecision. The stock is trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish and the 50-day has acted as support for the stock over recent trading days.

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• Bulls want to see big bullish volume come in and break Hut 8 up from the falling channel, the inside bar pattern and for the stock to rise up over Monday’s high-of-day at $13.28, which would negate the downtrend. The stock has resistance above at $13 and $14.18.
• Bears want to see big bearish volume come in and break Hut 8 down from the inside bar pattern, which would create a lower low and confirm the downtrend is intact. There is support below at $11.97 and $10.90.