Marathon Digital (MARA) stock price continued its deep crash this week as concerns about the company continued. It plunged to a low of $17.40 on Wednesday, its lowest swing since February 2024. It retreated by almost 50% from its highest point this year as it underperformed the price of Bitcoin.
Marathon Digital is facing substantial pressure
Marathon Digital is not the only Bitcoin mining company that is increasingly under pressure. Other companies like Riot Platforms, Bitfarms, Cipher Mining, and CleanSpark, among others.
MARA stock price has crashed as the price of Bitcoin has retreated from the year-to-date high of $73,400 to about $70,000. In most cases, Marathon tends to underperform when the Bitcoin price is in a strong bearish trend.
There are other concerns about Marathon. Data released last week showed that the number of coins mined in March stood at 894, an increase from 825 coins in March last year. It was also a bigger increase from the previous month’s 833.
The average number of coins mined per day came in at 28.8, higher than the 26.6 in the same period in 2023. That happened as the number of installed hash rate stood at 27.8 EH/s.
Marathon Digital noted that it suffered numerous challenges during the month. It had unexpected equipment failures and transmission line maintenance. The company also suffered substantial weather-related issues. The management said:
"While the site in Ellendale was briefly recovered and re-energized at the end of February, it had to be brought back down due to the persistence of quality issues with the transformers sourced at the site. The demonstrated complexity of re-energizing Ellendale indicates that capacity at this site is likely to be gradually increased over the coming months.”
These are signs that the company is facing substantial challenges ahead of the next Bitcoin halving event this month. Halving is a process that reduces the number of block rewards offered to miners.
In this case, analysts believe that the number of daily rewards will drop from the current 900 to about 450. If the price of Bitcoin fails to jump sharply, it will mean that companies like Marathon Digital will automatically make less money.
There is still a silver lining for MARA and other big companies. The halving event will likely push inefficient mining companies out of business and lead to a bigger market share for Marathon.
MARA stock price forecast
The daily chart shows that the MARA share price formed a double-top pattern at $31.12. In most cases, this pattern is usually one of the most bearish ones in the market. The stock is now nearing the neckline of this pattern at $14.68, its lowest level in January.
It is also attempting to move below the crucial support level at $17.5, its lowest level on March 18th. The stock has also dropped below the 50-day moving average while the Relative Strength Index (RSI) has retreated below the neutral point.
Therefore, the outlook for the MARA share price is extremely bearish for now, with the next target to watch being at $14.68. A break below that level will point to more downside in the coming weeks.
Contributors
