Bitcoin mining stocks such as Riot Blockchain (RIOT), Marathon Digital Holdings (MARA), and CleanSpark Inc. (CLSK) experienced declines in the pre-market session as Bitcoin (BTC) pulled back.
RIOT, MARA, and CLSK all dropped by more than 2%, mirroring the downturn seen in other cryptocurrency-related stocks like MicroStrategy (MSTR) and Coinbase Global (COIN), which fell by 1.5%.
Bitcoin’s Retreat Resumes
The retreat in crypto-linked stocks coincided with Bitcoin resuming its downtrend on Wednesday. Following its peak at $63,750 on Monday, BTC is currently hovering around $60,000, with uncertainty prevailing over its potential rebound.
Of critical concern is Bitcoin nearing the crucial support level at $58,273, which aligns with the 200-day Exponential Moving Average (EMA). The subsequent support level stands at $56,426, marking its lowest point since May.
Potential Bearish Signal
A breach below these levels could signal bearish sentiment dominating, possibly driving Bitcoin down towards the $50,000 threshold or even lower.
This latest downturn occurred in the wake of a substantial whale depositing nearly 2,000 Bitcoins into Binance through two separate transactions. While not always indicative, such deposits to exchanges often coincide with holders liquidating their positions.
Simultaneously, the German government has been actively selling its Bitcoin holdings, transferring coins worth $52 million to exchanges on Tuesday. As a result, data from CoinGlass indicates a rise in the volume of Bitcoin held on exchanges, increasing to 2.49 million on Tuesday from a recent low of 2.47 million last month.
Impact on Bitcoin Mining Companies
Continued selling pressure on Bitcoin could pose significant risks to Bitcoin mining firms like Marathon, CleanSpark, and Riot Blockchain. Historically, these companies have exhibited close correlations with Bitcoin’s price movements.
This downturn follows several months after the halving event, which reduced the block reward for miners. To offset this reduction, many of these firms have expanded their mining capabilities.
CleanSpark Achieves Record Hash Rate
CleanSpark notably achieved a hash rate of 20 EH/s, enabling the mining of 445 coins in June compared to 417 coins the previous month. This achievement followed its acquisition of five mining sites in Georgia.
Marathon Digital’s Performance
Marathon Digital mined 590 coins in June, marking a 40% decline from the same period last year but remaining consistent with its output in May.
Riot Blockchain’s Strategy
Meanwhile, Riot Blockchain focused on its acquisition of Bitfarms, a company that mined 189 coins in June.