BitMine stock price could be on the verge of a strong bullish breakout in the coming weeks or months if Tom Lee’s Ethereum prediction works out.
Summary
- BitMine stock price formed a falling wedge pattern on the daily chart.
- Tom Lee predicts that the Ethereum price will have a V-shaped recovery.
- Ethereum has some of the best fundamentals in the crypto industry.
BMNR stock was trading at the crucial support level at $20, inside a range it has been stuck at in the past few days. It remains well below the all-time high of $160.
Tom Lee, the company’s Chairman, believes that the stock will rebound once the ongoing Ethereum (ETH) price bearish market ends. In a statement, Lee argued that Ethereum has had eight major drawdowns since 2018. All these drawdowns ended with a V-shaped recovery, and this one will do the same.
At the same time, Lee noted that ETH has some potential demand drivers, including its status as the largest smart contract blockchain, with top companies such as JPMorgan leveraging its technology.
More data show that Ethereum’s demand remains strong as exchange supply continues to fall. It has dropped to the lowest level in years, while the staking queue has reached a record high. Ethereum is also the biggest network for stablecoin processing, handling trillions in transactions a quarter.
These factors explain why BitMine has continued to accumulate Ethereum this year. The company now holds over 4.3 million tokens worth over $8.4 billion. It has bought over 157k coins in the last 30 days and is generating yield by staking the coins. It is also generating yield by investing its cash balances.
The company is also aiming to invest in more startups, a move that may generate substantial returns in the future. For example, it invested $200 million in Beast Industries, a company owned by Mr. Beast.
BitMine stock price technical analysis
The daily timeframe chart shows that the BMNR stock price has formed a giant falling wedge pattern. This pattern consists of two descending, converging trendlines, with a bullish breakout occurring when the two lines near their convergence.
The Relative Strength Index has moved from the oversold level of 25 to 37 and is pointing upward.
Therefore, the most likely scenario is that the BitMine stock price rebounds to the key resistance level at $34, its highest level in January, about 72% above the current level.