BitMine stock has held steady above a crucial support level as the company nears an inflection point in its Ethereum accumulation strategy. BMNR rose to $25.58, up by nearly 100% from its lowest level this year. This rally may continue after it formed a highly bullish chart pattern and as Ether steadies.
BitMine stock rises as Ethereum rally continues
$ETH token jumped and crossed the important resistance level of $2,500. It was trading at $2,595, up sharply from the year-to-date low of $1,517. This rally coincided with the broader crypto market gains, that pushed the market capitalization of all coins up by over 4% to $2.75 trillion. Bitcoin also jumped above the crucial resistance level of $80,000.
BitMine is one of the top beneficiaries of Ethereum’s surge because of its large holdings. It now holds 5.956 million coins, currently valued at over $15.4 billion.
There are signs that $ETH price will continue doing well this year. As the chart below shows, the token has formed a bullish flag pattern and is now slowly nearing its upper side. This pattern is made up of a vertical line and a horizontal channel.
In addition to a bullish flag pattern, the token has slowly formed a golden cross pattern, which is made up of a 200-day and 50-day moving average crossover. It usually leads to more gains by confirming that the short-term momentum is accelerating.
Therefore, there is a possibility that it will jump to $3,000, which is about 16% above the current level.
$ETH price chart | Source: TradingView
Transition from cash burn to cash flow
BitMine stock is rising as the company remains in a transition period. After spending 15 months in an Ethereum accumulation phase, the company is now moving towards cash generation and strategic initiatives.
Unlike BitMine and other crypto treasury companies, Tom Lee has a strategy of owning just 5% of all $ETH tokens in circulation. The estimated amount is 6 million tokens, meaning that he now needs to buy just 43,000. If the recent trend continues, chances are that the company completed the accumulation this week. Alternatively, it may complete the process next week.
After this, the company, which has about 3 employees, will transition from dilution into focusing on free cash flow (FCF). It will do that by staking its tokens through MAVAN, the validator network it built recently. With the staking yield being about 2.7%, it means that the company will generate about 162k $ETH coins a year.
The value of these coins will depend on the prevailing Ethereum price, and the company will be able to use these funds to repurchase shares, pay dividends, and make strategic investments. This explains why Cantor Fitzgerald recently boosted its target for the stock to $60.
BMNR stock price technical analysis
BitMines stock chart | Source: TradingView
Technicals suggest that the BMNR stock has more room to run in the coming weeks. It remains above the important support level of $23.67, its highest point in March, April, and May this year.
The stock has formed a bullish flag pattern, a common bullish reversal sign in technical analysis. It is also about to form a golden cross pattern as the spread between the 50-day and 200-day moving averages narrows. These patterns suggest that the stock may rebound and possibly hit the key resistance level of $40 soon.
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