HUT - 3 Crypto Stocks to Sell in July Before They Crash & Burn
2024-07-01 09:29:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
If you’ve held crypto stocks for some time, you should periodically audit which crypto stocks to sell before getting burned.
Not that they couldn’t still go up, they could. But every investor needs an exit strategy for selling off all or part of their shares.
The crypto stocks have tended to be more stable that the cryptos themselves. Often, those companies have their fingers in other pies. So the crypto sector is just another string to their bow.
Choosing which crypto stocks to sell is not a prediction that the crypto market is going to tank or moon. It is an appraisal of the company and the overall market conditions.
That said, the crypto market being as volatile as it is, still weighs heavily on any crypto stock’s fortunes.
Currently, the crypto market has been in a medium to bearish phase. As happens all the time in the crypto world, an initial sell off tends to trigger panic selling very quickly .
Here are 3 crypto stocks to sell, especially if you are up on your investments.
Hut 8 Mining (HUT)
Hut 8 Mining ( HUT ), a Bitcoin ( BTC-USD ) mining company, grabbed attention as a notable meme stock in the midst of scrutiny from short-sellers. Recent developments have exacerbated concerns over its stock. The concern is a lack of positive response despite what should be bulling developments.
One development was the $ 150M investment HUT received , in order to boost AI infrastructure. HUT initially outperformed its peers upon this news.
The other big development was the announcement that HUT is set to float on the Russell 3000 Index .
Despite these major announcements, response on the charts hasn’t been very exciting. This would normally be a bullish signal. But the lack of bullishness gives a bearish signal instead.
On the charts, HUT is forming a clear double-top pattern dating back to December 2023. A red candlestick with a long tail paints from $17 the first part of that double top. This suggests it could be one of the crypto stocks to sell. If the double top follows through, a drop could follow to the $10 area.
Nvidia (NVDA)
In what might be an unpopular choice, next is Nvidia ( NVDA ). Nvidia? Really? Surely I’m just being a contrarian? Well, no.
NVDA, if it needs any introduction, has a dedicated GPU infrastructure for crypto mining.
Now before NVDA fans get too outraged, I’m not saying selling all NVDA shares is a wise choice. But it is clearly in a bubble. Now it’s far too late for most to join the NVDA train. It’s too high up and a long way down. But I have ridden other bubbles and been where Nvidia is now. I sold off part of my shares and enjoyed the earnings. If I had sold all of them, I may have made more. But I may also have lost it all.
Look up a textbook bubble graph and overlay it on Nvidia. These bubble repeat themselves over and over again. All Bitcoin bubbles overlay with the graph. So did the dot-com bubble. Anyone enjoying looking their Nvidia profit figures would do well to bank some of them.
Coinbase (COIN)
Coinbase ( COIN ) while not in a bubble, is another case of a stock on a big rise since the bottoms of last year. If you bought near the bottom in 2023, Coinbase may be one of the crypto stocks to sell. At least partially. That’s because COIN is sitting a the bottom of a downward channel at the start of July 2024. If it breaks down, so could your position.
It is worth saying that the downward channel also looks like a bull flag longer term. This is why it would be prudent to sell at least some holdings to protect you either way. If support holds, an investor can always look for new entry points with their sold positions already banked.
COIN is currently embroiled in a lawsuit against the SEC and FDIC over restrictive regulations placed upon them. Should the lawsuit fail, the SEC can continue denying Coinbase (and all crypto firms) access the federal banking system.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
On the date of publication, Sam Farnham did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
Since 2012, Sam has helped investors, traders and wealth seekers with his technical and fundamental analysis of the financial markets and has developed six trading systems during that time. He is always searching for more financial opportunities to share with readers.
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