BitMine Stock Crashes Amid BMNP and Ethereum Price Woes

Key Insights

• BitMine stock has crashed hard in the past few months.
• The recently launched BMNP preferred stock has also dropped.
• Ethereum continues its strong downward momentum.

BitMine stock price continued its slow meltdown this week. It has reached its lowest level since July last year, when it started its Ethereum accumulation strategy.

BMNR dropped to $13.32 from last year’s high of $160. It is now facing a double whammy of falling Ethereum prices and the BMNP crashing.

BitMine Stock is Facing a New BMNP Challenge

Tom Lee’s BitMine entered the preferred stock segment popularized by Strategy’s Michael Saylor this month. It launched the BitMine 9.5% Series A Perpetual Preferred Stock (BMNP) on June 10 this year.

The initial reception was positive as the stock jumped from $87 to a high of $93 within the first few days. It then suffered a big reversal, with the stock tumbling to the current $81. 4.

The ongoing BMNP stock crash has coincided with developments in Strategy’s STRC. It lost its $100 peg and is trading at $87. Other preferred stocks linked to Digital Asset Treasury (DAT) companies, including Strive’s SATA, have also deteriorated.

BMNP’s crash is risky for BitMine Immersion because it could force the company to sell its Ethereum tokens. Selling Ethereum will push its price lower. Alternatively, the company may need to raise cash by selling its shares, which will intensify the dilution.

Ethereum Price Crash is Continuing

BitMine stock is also at risk because of the ongoing Ethereum retreat. ETH token dropped to the crucial support level of $1,500. That’s much lower than its all-time high of $4,950.

ETH price has retreated because of the ongoing weakness in the crypto market. The valuation of all coins has fallen from $4.2 trillion to $2 trillion today.

One of the reasons for this is that the stock market in key countries like the United States, South Korea, and Japan has soared to their record highs. South Korea’s Kospi Index has jumped by over 70% this year, driven by the ongoing Samsung and SK Hynix gains.

The same is happening with key indices like Japan’s Nikkei 225 and the United States’ Nasdaq 100. Therefore, there is a likelihood that crypto investors simply rotated from the crypto market and pivoted to stocks.

A good piece of evidence for this is that spot Ethereum ETFs have continued shedding assets this week. They lost over $81 million on Thursday, bringing this month’s outflows to $458 million.

This year, these funds have lost over $1.3 billion in assets. That brought the cumulative total inflows to $10.9 billion.

In contrast, investors have continued to pile into stock ETFs, with the total inflows in the industry soaring to over $1 trillion. It is common for investors in an asset to capitulate whenever it underperforms the broader market.

The falling Ethereum price retreat is hurting BitMine particularly hard as its unrealized losses rise. It now holds 5.62 million coins valued at $8.7 billion. If Bitcoin remained at its all-time high of $4,950, these coins would now be valued at over $25 billion.

BMNR Stock Technical Analysis

The daily chart shows that the BitMine stock price has slumped in the past few months. It made a strong bearish breakout below the key support level of $17, its lowest level in February this year. This level also coincided with the lower side of the inverted cup-and-handle pattern.

It has also remained below all moving averages, a sign that the sell-off is intact. Also, the Average Directional Index (ADX) has jumped to 26, its highest level in over a year. This is a sign that the sell-off is intensifying.

Therefore, the stock will likely continue falling as sellers target the key support level of $10. The bearish outlook will be invalidated if it moves above the crucial resistance at $20.

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