- Bitcoin mining stocks have done well in 2023 because of the crypto performance.
- Bitcoin price has jumped by more than 90% this year and formed a bullish flag pattern.
Bitcoin mining stocks are helping the small-cap Russell 2000 index this year, helped by the surging cryptocurrency prices. The Russell 2000 index has soared by more than 10% while the S&P 500 and Nasdaq 100 indices have risen by more than 15% this year.
Bitcoin mining stocks jump
A closer look at the best-performing companies in the Russell 2000 index shows that most of them are in the Bitcoin mining industry. Cipher Mining, a company valued at $1.3 billion, has seen its stock jump by more than 720% this year. It has risen by almost 192% in the past 12 months.
The second-best company in the index is Bit Digital (BTBT), a company with a market cap of more than $363 million. Its stock has soared by over 620% this year. The other top Bitcoin mining companies in the index are Marathon Digital and Riot Platforms.
Despite these gains, all these shares remain significantly below their all-time highs. However, this recovery has provided some relief to all their investors since these companies moved close to bankruptcy in 2022.
These companies have done well as investors assess the impact of the current crypto prices on their profitability. Historically, these companies do well when Bitcoin is rising since they are able to sell their coins for a profit.
Bitcoin price outlook
Looking forward, these Bitcoin mining companies will depend on the next price action of Bitcoin. Turning to the daily chart, we see that the BTC price has been in a strong bulish trend in the past few months. It has then moved to a consolidation phase in the past two weeks. Along the way, Bitcoin has formed a bullish flag pattern, which is usually a bullish sign.
The bulish flag is usually characterized by a flag pole and a pattern that resembles a flag. In most periods, the coin tends to do well after the flag pattern ends. The challenge is that this flag is happening at the same point as the double-top pattern.
Also, another challenge is that the coin has failed to move above the upper side of the bullish flag despite the important news this week. The most important news was on the Ripple vs SEC case and the US inflation data.
Therefore, these Bitcoin mining stocks will react to whether Bitcoin is able to continue the bullish trend in the next few months.
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