BitMine Immersion Technologies is entering a high-risk phase as the paper losses on its Ethereum holdings continue to increase. The stock has failed to maintain recent gains, while both technical and crypto-related signals point to weakened conviction.
As of now, on February 10, BitMine's total invested capital amounted to nearly $15 billion. Now, the portfolio value has fallen to approximately $7.7 billion.
This means that nearly 49% of the investment value has been wiped out on paper. Meanwhile, Ethereum is trading near $1950, while BitMine's realized cost price is around $3850. With the ETH price nearly 50% below the average purchase level, most holdings are still significantly underwater.
Cost-basis loss and hidden divergence signal increasing selling pressure
BitMine's greatest weakness is the shrinking margin of safety.
The realized price shows where the company accumulated most of its Ethereum. When the market price remains much lower than this level, companies are often pressured to reduce exposure.
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Current data shows:
Average ETH cost price: $ 3850
Current ETH price: $ 1950
Unrealized losses: 49%
This puts BitMine in a vulnerable position. Technical signals reinforce this risk.
Between November 18 and February 9, BMNR formed lower peaks on the daily chart, while the Relative Strength Index (RSI) formed higher peaks. RSI measures momentum by looking at buying and selling power. When the price makes lower peaks and RSI makes higher peaks, a hidden bearish divergence is formed. This indicates weakened momentum below the surface.
Shortly after this divergence appeared, selling picked up again. BMNR had risen nearly 26% from the bottom in January. However, the rise could not hold, and the price is now threatened by a pullback, driven by divergence and increased pressure from cost price.
Weak cash flow and crossover risk indicate weakened confidence
Large investors show early signs of hesitation. Chaikin Money Flow (CMF) tracks whether large investors are accumulating or selling out. Values above zero typically indicate buying. Values below zero suggest selling pressure.
From the end of November to early February, the CMF trend was upward, despite falling prices. This showed some long-term support, which is still present. However, even during the recent rise of 26%, CMF failed to break the falling trend line. It also failed to create new peaks or move above zero. This means the rise lacked strong support from large wallets, and the current trend still points towards significant cash outflows.
Moving averages provide an additional warning. The 100-day exponential moving average (EMA) is now approaching the 200-day EMA. An exponential moving average gives more weight to the most recent prices and is used to detect early trend changes.
When short-term averages fall below long-term ones, it often signals deeper weakness. Already on January 27, a bearish (death) cross occurred when the 50-day EMA fell below the 200-day EMA. After this signal, BMNR fell more than 44%.
If a new bearish crossover occurs, downward pressure may accelerate, even if not as forceful as a death crossover. This risk increases if Ethereum continues to be weak. BMNR still shows moderate correlation with ETH near 0.5.
Persistent weakness in ETH may directly weigh on the stock.
Key levels for BitMine stock indicate where the next decline may start
With increasing losses on cost price, BitMine's stock price structure is now critically important. The most central short-term support level is near $ 17, just over 10% from today's level. This level has served as a floor during recent consolidation.
If BMNR falls below $ 17, the decline may significantly increase.
Below this area, the next support level arises around $ 15. If this breaks, Fibonacci projections point towards $ 11, marking the 0.618 retracement level — historically a strong level. A downturn towards $ 11 would correspond to over 40% decline from current levels.
On the upside, the rise remains challenging. BitMine's stock price must regain $ 21 to alleviate the immediate pressure. This level corresponds with a previous resistance area.
Only above $ 21 will the short-term structure begin to improve. Further movement towards $ 26 will require both higher ETH prices and increased demand from large capital. Currently, both are uncertain. As long as ETH trades far below BitMine's cost price and capital inflow is weak, rises are likely to encounter heavy selling pressure.
