BitMine Stock Under Pressure as Ethereum ETF Outflows Reach $1.3B

Key Insights

• BitMine stock remains under pressure because of the ongoing ETH retreat.
• Spot Ethereum ETF outflows have jumped to $1.3 billion this month.
• Technical analysis suggests that the stock may drop to $20.

BitMine stock remained under pressure as Ethereum ETF withdrawals continued and ETH traded near $2,300. BMNR closed at $22.05 on Oct. 28, down substantially from its reported September peak.

The decline increased attention on BitMine’s cryptocurrency treasury and staking revenue. Meanwhile, technical indicators raised the possibility of another retreat toward $20.

BitMine, the biggest Ethereum holder, is at risk as American investors continue dumping their coins. Data show that spot Ethereum ETFs have continued to shed assets this week. They had over $21.4 million in outflows on Wednesday after losing $60 million on Tuesday and $88 million a day earlier.

These funds are on track to have their worst month this year after losing $1.35 billion in assets. Their worst month previously was in November last year, when investors redeemed over $1.42 billion in assets.

The rising outflows is a sign that these investors expect the Ethereum price to continue falling. It has already dropped from a high of $2,796 in September to the current $2,317. As a result, the value of its assets has continued falling this month.

The daily chart shows that ETH price has been under pressure in the past few weeks, moving from a high of $2,800 to the current $2,318. It has already moved below the important support level of $2,358, its lowest points in August and September this year.

The coin has slumped below the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. A closer look at the chart shows that it has formed a head-and-shoulders pattern, a common bearish reversal sign in technical analysis.

Ethereum has also slumped to the 38.2% Fibonacci Retracement level, while its oscillators have continued falling. Therefore, the path of the least resistance for the token is bearish, with the next key target to watch being at $2,000.

BitMine is the company most exposed if the Ethereum retreat continues. The company has continued accumulating these tokens in the past few months and now holds 6,051,933 coins, which are valued at over $14 billion. These coins are about 4.95% of Ethereum’s supply, with the company nearing the end of its accumulation. Therefore, if Ethereum drops to $2,000, its total holdings will drop to $12.1 billion.

On the positive side, BitMine is nearing the end of its Ethereum accumulation, meaning that its investors can expect to be diluted less. After this process ends, the company will now focus on monetizing its ETH tokens through staking. It expects to generate over $400 million in annual staking revenue.

The company has fewer than five employees, meaning its stakeholder revenue will be distributed to its shareholders through buybacks and dividends. Indeed, the company has already repurchased 22.9 million shares this year, and the process will continue.

Technicals show that the BMNR stock price has more downside to go in the near term. It has already dropped below the important support level of $23.16, the 50-day Exponential Moving Average (EMA).

The stock has also flipped its Supertrend from green to red, a sign that bears have prevailed. Therefore, the most likely scenario is that it continues to fall, with the next key target at $20. A drop below $18. However, a rebound above the 50-day moving average will invalidate the bearish outlook.

This article is for informational purposes only and does not constitute financial advice. Cryptocurrency-linked equities carry volatility, business risks and potential capital losses. Investors should conduct independent research before making decisions.

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