BitMine stock price has been in a strong downward trend and is now in its eighth consecutive week in the red. BMNR has dropped to its lowest level since July last year. This article highlights some of the top reasons why this Ethereum treasury stock may continue falling in July.
BitMine Stock May Drop Amid Ethereum Weakness
BMNR’s share price may continue its strong downward trend amid weakening fundamentals in Ethereum and bearish technical indicators. Fundamentally, Ethereum is facing significant challenges, as evidenced by its sharply declining network fees.
Data show that the network has generated less than $100 million in fees so far this year and no longer ranks among the top 10 blockchain networks by fee revenue. It has been beaten by crypto projects like Hyperliquid and PancakeSwap.
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More data shows that demand for Ethereum on Wall Street has largely dried up. Investors dumped Ethereum ETFs worth over $500 million this month, following $540 million in sales in May. In total, these funds have lost over $1 billion in assets this year.
Ethereum is also seeing weak demand in the futures market, where its open interest has continued to fall. In addition, Ether’s technicals suggest the coin has more downside in the near term.
A sustained Ethereum price retreat will be bearish for BitMine, which holds over 5.8 million tokens.
At the same time, there is a risk that BitMine will find itself in the situation where Strategy is today. The company launched BMNP last month, raising $273 million in cash, which it will use to buy Ethereum. The challenge, however, is that this asset pays dividends every week.
While BMNP is safe for now, there is a risk that it will struggle in the future. On the positive side, BitMine is generating millions of dollars in revenue through staking, a figure that may soar if Ethereum rebounds.
Another positive is that BitMine is on track to hit the 5% Ethereum ownership target later this year. Such a move will help it reduce the weekly dilution that its investors suffer.
BMNR Stock Price Technical Analysis
The daily chart shows that the BitMine share price has slumped in the past few months. It recently plunged below the key support level of $17.15, its lowest level on February 5.
The stock has formed a descending channel and remains below the 50-day Exponential Moving Average (EMA). It has also slumped below the Ichimoku Cloud and the Supertrend indicators, while the Relative Strength Index (RSI) continues its downward trend.
Therefore, there is a risk that the stock will continue to fall as sellers target the key support level of $10, which is about 20% below the current price.
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