Top 3 Reasons Why Tom Lee’s BitMine Stock May Crash to $10 or Below

Key Insights

• BitMine stock price has crashed and moved below a key support level.
• Its technical analysis suggests that the shares will continue falling this year.
• Ethereum has a combination of weak technicals and fundamentals.

BitMine stock price has been in a slow downward trend. Recently, it crashed below a crucial support level as the crypto market sell-off intensified. BMNR was trading at $15.90 on Monday, down sharply from last year’s high of $160. This retreat may continue as the shares face some major headwinds.

BitMine Stock Technicals Suggest it Has More Downside

The daily chart shows that the BitMine stock price has sunk in the past few days. And last week, it moved below the crucial support level at $17.75, its lowest point on March 30 and February 5 this year.

The BMNR share has formed an inverted cup-and-handle pattern, a common bearish continuation sign in technical analysis. This pattern consists of a rounded top and consolidation.

BitMine stock price has crashed below the lower side of the inverted cup. It also moved below all moving averages, a sign that bears are gaining control.

At the same time, the Relative Strength Index (RSI) has been in a strong downward trend. That moved from a high of 60 in April to the current 31. This means that the coin has a strong downward momentum.

The Average Directional Index (ADX) has continued rising, a sign that the momentum is growing. Therefore, the path of the least resistance is downwards, with the next key support level to watch being at $10.

On the other hand, a move above the key resistance level at $20 will invalidate the bearish outlook.

Ethereum Price Has Highly Bearish Technicals

The other key bearish catalyst for the BMNR share price is that Ethereum has some of the most bearish technicals. This is important because the company is now the largest holder of Ethereum. It has over 5.4 million coins in its portfolio.

As a result, the BitMine stock price does well when the token is rising and vice versa. The daily chart shows that Ethereum price has slumped below all moving averages. It also recently dropped below the important support level at $1,800, the lowest swing in February this year.

This low price was the lower side of the inverted cup-and-handle pattern. It is now attempting to retest it. A break-and-retest is one of the most common ways to confirm a continuation in technical analysis.

Therefore, the coin will likely retreat further and potentially hit the key support level of $1,000. Such a move will affect BitMine as the value of its holdings drops.

BitMine Stock Deviating Because of Ethereum’s Weak Fundamentals

The BMNR stock price has more downside because of Ethereum’s weak fundamentals. Data shows that Ethereum’s metrics are weakening across the board.

For example, data shows that Ethereum’s role in the decentralized finance (DeFi) continues to weaken. Its total value locked (TVL) has dropped from nearly $100 billion last year to $37 billion today.

Aave, which had over $45 billion in assets in its platform, dropped to below $12 billion. Most of this selling accelerated after the recent KelpDAO hack, which led to its rescue by DeFi United.

More data shows that the total supply of stablecoins on Ethereum has dropped in the past few months. It stood at $168 billion, down by 3% from the same period last month. The 30-day volume was unchanged at $898 billion.

Ethereum is no longer making the money it used to make a few years ago. Data shows that the chain fees dropped to just $85 million this year. It made $523 million last year, down from a peak of $9.9 billion in 2021.

Therefore, these weak fundamentals may make it hard for investors to buy the token over time. Some are now tilting towards Hyperliquid, whose metrics continue rising this year.

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