2023-09-21 09:28:15 ET
Marathon Digital (NASDAQ: MARA) stock price has been in a strong freefall in the past three months. The sell-off continued this week even as the price of Bitcoin held quite steady above $26,000. In all, MARA share price has plunged by more than 55% from the highest point this year.
Marathon transactions updates
Marathon Digital, one of the biggest Bitcoin mining companies in the world, has come under intense pressure in the past few months. Its stock has dropped even as Bitcoin has held quite well after plunging below $25,000 on Monday last week.
Broadly, the sell-off is in line with the performance of the broader stock market. Well-known companies like Apple, Tesla, and Nvidia have seen their shares pare back some of their initial gains.
Marathon has also dropped because of the overall performance of Bitcoin and other cryptocurrencies. After soaring to a high of $32,000 a few months ago, Bitcoin has slipped to ~$26,000. It has also formed a death cross, one of the most accurate bearish signs in the market.
Marathon Digital and other Bitcoin mining stocks like Argo Blockchain and Riot Platforms have a close correlation with BTC. In most periods, they tend to move faster than Bitcoin, as we saw earlier this year.
Meanwhile, MARA stock price has also crashed because of corporate actions by the management. In a statement on Wednesday, the company said that it had reduced its debt load by 56%.
It did that by exchanging $417 million of notes with 31.7 million new shares. As a result, existing shareholders were diluted quite a bit. Still, I believe that this was the right decision since it puts the company’s balance sheet in a better place. Also, holding too much debt in this high-interest rate environment would be more expensive.
Marathon still holds over 13,000 BTC in its balance sheet and is adding about 34.5 BTC per day.
MARA stock price forecast
The daily chart shows that the Marathon Digital share price has been in a strong bearish trend in the past few months. It has dropped below the important support $12.74, the highest level on April 18th. The shares also dropped below the ascending trendline shown in red.
Most importantly, Marathon Digital stock price has slipped below the 50-day and 100-day exponential moving averages. It is also approaching the key support level at $8.56, the lowest level in June.
Therefore, the shares will likely continue falling in the coming days as sellers target the support at $8. In the long term, however, the shares will likely bounce back. Besides, it has improved its balance sheet and has a strong market share in the BTC mining industry.
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