- BitMine stock price continued its consolidation phase this year.
- It has remained between the support and resistance levels at $17.68 and $24.
- The shares will likely surge in the near term as it moves from dilution to yield.
Tom Lee’s BitMine stock price has remained in a deep slumber in the past few months. It has remained between the key support and resistance levels of $17.68 and $24 since February. BMNR was trading at $23 on Tuesday and may be on the cusp of a strong bullish breakout as it transitions from dilution to yield.
BitMine is About to Transition From Dilution to Yield
The BMNR stock price has remained in a narrow range in the past few months. Notably, it has stalled even after the Ethereum price surged by over 35% from its lowest level this year.
One possible reason is that the company has become highly dilutive as it continues to accumulate Ethereum. It has now spent over $10 billion in its buying spree.
On the positive side, however, the company is nearing the end of its Ethereum buying spree. It has already bought over 404k tokens in the last 30 days, bringing its total holdings to 5.2 million, which are now worth over $12 billion. Its Ethereum holdings are now equivalent to 4.31% of the total supply.
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BitMine differs from Michael Saylor’s Strategy in that it aims to acquire only 5% of Ethereum. As such, it is likely to hit the 5% target in July this year.
As a result, the company will now evolve dramatically, moving from a highly dilutive firm to one generating high-margin revenue. It will generate most of its revenue from Ethereum staking, which yields about 3.8% annually.
Buying 6 million tokens and earning about 3.85% annually means that it will make 231k. At the current price, the staking yield will exceed $540 million per year.
Tom Lee believes the Ethereum price will ultimately reach $250k. Such a move would make over $57.7 billion in high-margin revenue each year. A more realistic prediction of $10,000 would make it over $2.31 billion annually.
BMNR Stock Price Prediction: Technical Analysis
The daily chart reveals that the BitMine share price has remained in a narrow range for over three months. It has remained between the key support and resistance levels at $17.68 and $24.
A closer look shows that it has formed a double-bottom pattern. It has also entered the accumulation stage of Wyckoff Theory. This stage will now be followed by the markup phase, which is characterized by higher demand.
The coin has also moved slightly above the 50-day Exponential Moving Average (EMA). Also, the Relative Strength Index (RSI) has started moving upwards.
Therefore, a volume-supported surge above the key resistance level at $24 will signal further gains, potentially to the $35 or $50 key resistance levels. A move below the $17.68 support level will invalidate the bullish outlook.
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