BitMine Immersion Technologies is entering a high-risk phase as the accounting losses from the company's holdings in Ethereum continue to deepen. The stock price has failed to sustain the recent recovery, while both technical signals and those linked to crypto indicate a weakening firmness.
As of February 10, the total investment in BitMine is valued at nearly 15 billion USD, while the current value of the investment portfolio has dropped to about 7.7 billion USD.
This means that nearly 49% of the investment value has been wiped out in the account. Meanwhile, Ethereum is trading near the level of 1,950 USD, while the average cost at which BitMine bought is around 3,850 USD. Thus, ETH priced below the average buy point by nearly 50% has resulted in most holdings being deeply in loss.
Cost losses and Hidden Divergence signals indicate increasing selling pressure.
A major weakness of BitMine is the continuously decreasing security.
The average cost shown indicates where the company has accumulated Ethereum. When the market price is significantly below this range, the company faces continuous pressure to reduce risk.
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The latest data shows:
Average ETH cost: 3,850 USD
Current ETH price: 1,950 USD
Unrealized loss: 49%
Thus, this puts BitMine in a much more vulnerable position, and various technical signals further reinforce this risk.
Between November 18 and February 9, BMNR established lower highs on the daily chart, while the Relative Strength Index (RSI) created higher highs. RSI is used to track momentum by measuring buying and selling pressure. When the price creates lower highs, but RSI creates higher highs, it becomes a hidden bearish divergence indicating that momentum is weakening without obvious signs.
After the divergence signal, selling occurred again. BMNR rebounded nearly 26% from the January low, but the recovery could not sustain itself and is now at risk of a decline under pressure from the divergence and rising average costs.
Weak cash inflows and cross risks reflect declining confidence.
Large amounts of money are beginning to show signs of hesitation. The Chaikin Money Flow (CMF) is used to track whether large investors are accumulating or taking profits. A value above zero often indicates buying, while a value below zero shows selling pressure.
Between late November and early February, CMF trended upwards even as prices fell. This indicates long-term support that remains in place. However, even during the recent 26% rebound, CMF could not break above its own downward trend line, nor could it create a new high or cross above the zero line. This shows that this recovery lacks strong support from large wallets, and the current trend still leans towards selling pressure from large amounts of money.
Moving averages also send additional warning signals, as the 100-day EMA is approaching the 200-day EMA. This Exponential Moving Average (EMA) gives more weight to recent prices, thus helping to identify trend changes more quickly.
When the short-term average falls below the long-term average, it often signals deeper weakness. Previously, on January 27, a death cross occurred when the 50-day EMA crossed below the 200-day EMA. After this signal, BMNR fell more than 44%.
If another downward crossover signal occurs, downward pressure may accelerate, although not as severely as a death crossover. This risk will increase if Ethereum remains weak. BMNR still shows a moderate correlation with ETH near 0.5.
The ongoing weakness of ETH may directly impact stock prices significantly.
The important stock level of BitMine indicates the beginning of a new decline.
As accumulated losses increase, the price structure of BitMine has become a major issue. The most critical short-term support remains around 17 USD, or slightly above the current level by less than 10%. This support was previously a base during the accumulation phase.
If BMNR breaks 17 USD, the downward pressure may significantly intensify.
If it breaks out of this zone, the next support level will be around 15 USD. If that level cannot hold, Fibonacci projections will point to 11 USD, which corresponds to the 0.618 retracement level that has been strong in the past. A drop to 11 USD would equate to an additional price decrease of more than 40% from the current level.
In the bullish phase, recovery remains difficult. The BitMine stock price must return above 21 USD to alleviate short-term pressure, which corresponds to the previous resistance point.
The short-term structure will only begin to improve if the price stays above 21 USD. Additionally, a rise to 26 USD will require stronger Ethereum prices, as well as additional demand from large investors. However, both of these factors remain uncertain, as ETH is still trading well below BitMine's cost, and cash inflows continue to weaken, making recovery likely to face significant selling pressure.
