Bitcoin and Ethereum have been a focus of mine for years, but now some crypto related stocks are also coming across my radar. Riot Platforms (RIOT) is a large-scale mining company located in the United States of America. Marathon Digital (MARA) is a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem. While neither of these companies are currently profitable, MARA is estimated to produce strong earnings for both 2023 and 2024. Demand for RIOT and MARA would most likely increase if the price of Bitcoin and Ether rose. Institutional investors who desired to gain exposure to the cryptocurrency space would look for places to deploy their capital, and RIOT and MARA would fit that description.
MARA and RIOT both have very similar looking charts. After doubling in price, both have been consolidating rather nicely with supportive action coming off the 20-day ema. Whenever I see a stock double like this and then move in a calm manner, I always make a note to keep it on my watchlist as a potential high tight flag. These are explosive patterns that were characterized by William O'Neil. These type of stocks offer enormous potential, especially when their charts are showing signs of institutional accumulation. Palantir is a stock I currently own that emerged from a high tight flag pattern.
Because MARA and RIOT are crypto related stocks, it makes sense to get a view of how Bitcoin and Ether are currently trading. BTCUSD and ETHUSD are both forming very beautiful bases. While both tried to breakout in early July, it looks like some further digestion was needed. While daily pullbacks can be scary in real time, a quick look at the weekly charts shows that both are actually acting quite well. As a long-term holder, I'm content to sit through this type of action as long as it remains "healthy." Remember, as Jesse Livermore once stated, "Never be afraid of the normal movement. But be very fearful of abnormal movements." That's really the key if you are holding a position or waiting to make a purchase: to be able to assess the health of a chart just as a doctor can assess the health of a patient. And so far, RIOT, MARA, Bitcoin, and Ether are looking quite healthy.
Risk right. Sit tight.
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Full Disclosure: I currently own Palantir, Bitcoin, and Ethereum.
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