- Marathon Digital share price has moved sideways in the past few days.
- The SEC is expected to approve a spot Bitcoin ETF this week.
- The stock will likely have some volatility in the coming months.
Marathon Digital (MARA) stock price has dived in the past few days even as hopes of a spot Bitcoin ETF approval rise. MARA shares retreated from its December high of $31.21 to a low of $24.12. Other Bitcoin mining companies like Cipher Mining and Riot Platform have also retreated.
Spot Bitcoin ETF approval
Bitcoin mining companies will be in the spotlight this week as investors focus on the Securities and Exchange Commission (SEC). A committee of the agency is expected to vote to approve a spot Bitcoin ETF later this week.
If this happens, this will be one of the biggest stories in the industry as it will lead to more inflows from large institutional investors. Rumours are that over $2 billion have been committed to Blackrock’s iShares Bitcoin ETF.
A spot ETF will benefit Bitcoin mining companies since they will need to buy their holdings from somewhere. With supply in exchanges still being low, there is a likelihood that many ETF providers will start buying from miners directly.
Meanwhile, Marathon Digital is expected to report strong financial reports for the fourth quarter. The company mined a record 1,853 bitcoins in December, a 290% increase from the same period in 2022. Its hash rate jumped by 18% to 22.4 EH/s.
Marathon mined 1,187 coins in November and 1,202 coins in October. This means that it mined 4,202 coins in the final quarter of the year. Bitcoin price averaged $40,000 in this period, meaning that the company would have made over $168 million in revenue if it sold all of them.
Marathon’s Bitcoin holdings have continued rising. They jumped by 24% YoY in December to 15,174. At the current price, these coins are worth over $652 million.
The following days could see the stock’s volatility rise if the SEC approves a Bitcoin ETF. If this happens, there is a likelihood that Bitcoin price will retreat as investors sell the news. This is known as buy the rumor, sell the news.
However, in the longer term, there is a likelihood that MARA stock will do well. Besides, there are still hopes that the Fed will start cutting rates this year while halving will happen in April. While halving will slash its earnings, Bitcoin tends to rally ahead of the event.
MARA stock price forecast
Turning to the daily chart, we see that the Marathon Digital stock price has remained on edge in the past few months. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA).
The Relative Strength Index (RSI) has moved below the extremely overbought point at 90 to 60. Therefore, I suspect that the shares will experience increased volatility this week. This volatility will likely see it retreat to the key support at $19.85, the highest swing on July 14th.
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