BitMine Immersion Technologies is now entering a high-risk phase, as they are experiencing increasing paper losses on their Ethereum holdings. The stock is unable to maintain its recent gains, and both technical signals and crypto signals indicate that confidence is weakening.
On February 10, BitMine had invested a total of nearly 15 billion USD. The current value of the portfolio has fallen to approximately 7.7 billion USD.
This means that nearly 49% of the investment's value has disappeared, on paper. Meanwhile, Ethereum is trading close to 1,950 USD, while BitMine's average purchase price is around 3,850 USD. Since ETH now costs almost 50% less than the average price, most holdings are significantly down.
Losses on acquisition cost and hidden divergence show increased selling pressure
BitMine's biggest weakness is that the margin of safety is shrinking.
The realized price shows where the company bought most of its Ethereum. When the market price is far below this level, companies are pressured to reduce their holdings.
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These figures apply now:
Average ETH acquisition price: 3,850 USD
Current ETH price: 1,950 USD
Unrealized loss: 49%
BitMine therefore finds itself in a vulnerable position. Technical signals confirm this risk.
Between November 18 and February 9, BMNR made lower highs on the daily chart, while the Relative Strength Index showed higher highs. RSI indicates the strength of buying and selling. When the price makes lower highs but RSI makes higher highs, a hidden bearish divergence forms. This shows that strength is decreasing in the background.
Shortly after this divergence, selling began again. BMNR had increased by almost 26% from the January bottom. But the rise did not continue, and now the stock risks a decline again due to the divergence and pressure from the high purchase price.
Weak money flow and crossover risk show decreased confidence
Large investors are now showing signs of hesitation. Chaikin Money Flow, or CMF, indicates whether large players are buying or selling. Values above zero usually indicate buying, while values below zero point to selling pressure.
Between the end of November and the beginning of February, CMF increased despite prices falling. This indicated some long-term support, which remains. However, during the recent 26% recovery, CMF failed to break above the falling trend line. It also did not cross above the zero line. This means that large wallets did not buy in properly during the price rise, and the trend still points to the big players selling.
Moving averages provide yet another warning signal. The 100-day exponential moving average (EMA) is now approaching the 200-day EMA. EMA gives more weight to recent prices, making it easier to see trends early.
When shorter moving averages fall below longer ones, it often indicates weakness. On January 27, a bearish death cross signal appeared when the 50-day EMA fell below the 200-day EMA. After the signal, BMNR fell over 44%.
If a new bearish crossover forms, downward pressure could increase, although not as strongly as with a death cross. This risk increases if Ethereum continues to be weak. BMNR still shows a moderate correlation with ETH close to 0.5.
If ETH continues to be weak, it could directly weigh on the stock.
Key BitMine stock levels indicate where the next decline could begin
As losses on the acquisition price increase, BitMine's stock price structure is now crucial. The most important support in the short term is around 17 USD, just over 10% from current levels. That level has acted as a base during the recent consolidation.
If BMNR drops below 17 USD, the decline could accelerate rapidly.
Under this area, the next support is around 15 USD. If it does not hold, Fibonacci projections point to 11 USD, which is the 0.618 retracement level, a historically strong level. If the price approaches 11 USD, it indicates a further decline of over 40% from current levels.
On the upside, the recovery is still difficult. The price of BitMine stock must reclaim 21 USD to alleviate immediate pressure. That level coincides with previous resistance.
The short-term price structure improves only above 21 USD. To move towards 26 USD, a stronger Ethereum price and increased buying interest are required. Currently, both are uncertain. As long as ETH trades far below BitMine's purchase price and capital flows decrease, upward movements are likely to face significant selling pressure.
