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Friday, December 3, 2021

Marathon Digital rebounds from Bitcoin and Ethereum: but will that be enough to counter the trend?

On November 15, the shares of Marathon Digital Holdings Inc. fell more than 27% after the company said it received a subpoena from the US Securities and Exchange Commission asking for messages and documents regarding its data center in Hardin, Montana.

The sell-off continued between Tuesday and Thursday, with Marathon Digital down another 13 percent to a low of $ 47.41, but this time in sympathy with Bitcoin and Ethereum, which have tumbled about 15 percent and 14 percent, respectively, since Sunday 24. closing hour prices.

Marathon Digital bounced off lows on Friday following Bitcoin and Ethereum, but stocks will have to work hard before nullifying the bearish pattern and trend.

Digital map of the marathon

Marathon Digital hit a new all-time high of $ 83.45 on Nov.9, but fell 25% the following day after a bearish reaction to its third quarter earnings report. The fall was also bought during November 11 and 12 when the Marathon peaked at $ 76.83.

A news-related selloff on November 15, coupled with a daily high on November 12, confirmed that the stock is currently trading in a downtrend, with the most recent lower low on November 18 at $ 47.41. To counter the downtrend, Marathon Digital will soar above the $ 76.83 level. If Marathon Digital fails to rise above the level again, it will likely end up making another lower low or settling in a sideways consolidation pattern.

There is also the possibility that Marathon Digital could turn into a bearish flag pattern on the daily chart, with a pole formed between November 15 and 18 and a flag formed between Thursday and Friday. Traders can watch the flag pattern break at high volume to assess if the pattern has been recognized.

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If the bearish flag becomes a recognized pattern, the measured movement, calculated by taking the pole distance as a percentage and subtracting it from the top of the flag, is around 33 percent, indicating that Marathon Digital could return to the $ 36 level in the future. The bearish flag will disappear if the stock is able to recover the eight-day exponential moving average (EMA) as support.

Marathon Digital is trading about 6 percent below the eight-day and 21-day EMA, and on Friday, the eight-day EMA began to cross below the 21-day, which is a bearish indicator. The stock is trading above the 50-day simple moving average (SMA), which is bullish, and on October 18, the 50-day moving average acted as support.

The bulls want to see more bullish volume push Marathon Digital higher through the eight-day EMA and the matching resistance at $ 57.75. Above the level, there is further resistance at $ 61.67 and $ 65.69.
The bears want to see big bearish volume and Marathon Digital fall through the flag formation below the most recent low low, leading to the loss of support on the 50-day moving average. Marathon Digital support is $ 54.11 and $ 48.90.

Melanie Shaffer

© 2021 The Epoch Times. The Epoch Times does not provide investment advice. All rights reserved.

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