BitMine Immersion Technologies, a digital finance strategy company for Ethereum, is entering a high-risk phase. The valuation losses on its Ethereum holdings continue to deepen. The stock has not been able to maintain its recent rebound. Both technical signals and cryptocurrency-linked signals suggest a weakening of investment confidence.
As of February 10, the total investment of BitMine is approximately $15 billion. The current portfolio value has dropped to about $7.7 billion.
This means that about 49% of the investment value has disappeared as evaluation loss. At the same time, Ethereum is trading around $1,950. BitMine's realized cost basis is about $3,850. Since the ETH price is around 50% lower than the average buying price, most holdings are in a state of significant loss.
Cost lossยทhidden divergenceโฆ Selling pressureโ
BitMine's biggest vulnerability is that the safety margin is decreasing.
The realized price shows the price range at which the company purchased most of its Ethereum. If the market price remains well below this level, the company faces pressure to reduce positions.
Would you like more insights like this token insight? You can subscribe to the daily crypto newsletter published by editor Harsh Notariya here.
The current data is as follows.
ETH average buying price: $3,850
Current ETH price: $1,950
Evaluation loss: 49%
This puts BitMine in a vulnerable position. Technical signals support this risk.
From November 18 to February 9, BMNR formed lower highs on the daily chart. Meanwhile, the Relative Strength Index (RSI) has been making higher highs. The RSI measures the strength of buying and selling to track momentum. When the price forms lower highs and the RSI makes higher highs, it indicates hidden bearish divergence. This suggests that momentum is weakening internally.
The selling pressure resumed immediately after this divergence appeared. BMNR rebounded about 26% from the January low. However, the rally could not maintain its strength, and the risk of adjustment is increasing due to the current divergence and pressure on the buying price.
Weak fund flowsยทdeath cross riskโฆ Erosion of trust
Large investment funds are showing initial signs of hesitation. The Chaikin Money Flow (CMF) tracks whether large investors are buying or selling. A figure above 0 usually indicates buying. Below 0 suggests selling pressure.
From the end of November to early February, the CMF rose despite the price decline. This indicated support from some long-term investors. However, even during the recent 26% rebound, the CMF did not break the downtrend line. It did not create new highs and did not exceed the zero line. This means that the rally proceeded without strong buying support from large investors, and the current trend still indicates a large outflow of funds.
The moving averages are also showing additional warning signals. The 100-day exponential moving average (EMA) is now approaching the 200-day EMA. EMA gives more weight to recent prices, making it useful for capturing early trend changes.
When the short-term moving average crosses below the long-term line, it usually indicates a deeper bearish signal. On January 27, the 50-day EMA crossed below the 200-day EMA, resulting in a death cross. Following this signal, BMNR dropped by more than 44%.
If another downward cross is formed, the downward pressure may increase even if it is not as strong as a death cross. This risk increases if Ethereum continues to show weakness. BMNR still shows an intermediate correlation of about 0.5 with Ethereum.
If Ethereum continues to show weakness, it could put direct pressure on BitMine's stock price.
BitMine major stock price range... Next downward starting point
As the cost basis loss increases, the structure of BitMine's stock price has become very important. The most critical support level in the short term is near $17, which is about 10% above the current price. This range was an area where the recent bottom was established.
If BMNR loses $17, the downward trend could sharply intensify.
Below this price, the next support level appears at $15. If that point also breaks down, according to Fibonacci retracement, $11 serves as a support level, which has historically acted as a strong support level at the 0.618 retracement level. A drop to $11 would imply an additional decline of over 40% compared to the current price.
A bullish reversal is currently difficult. BitMine's stock price needs to recover $21 to alleviate short-term downward pressure. This price aligns with past resistance levels.
The short-term structure only begins to improve above $21. Further rise to $26 is only possible if Ethereum shows strength and large investor demand returns. As of now, both conditions are uncertain. In a situation where Ethereum is trading well below BitMine's buying price and fund inflows are weak, even if a rebound occurs, the selling pressure is likely to be strong.
