Bitcoin miner Marathon Digital (MARA) is skyrocketing alongside other cryptocurrency plays in a frenzy that’s led to eye-popping returns over the last few weeks. But the window to lock in gains for MARA stock may be set to close soon.
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MARA stock is surging more than 13% in the stock market today. Heavy volume indicates continued interest in Marathon Digital shares from large swathes of traders.
MARA stock is on a hot streak that began earlier this month, with shares currently trading 127% above their 50-day moving average.
But the stock’s impressive run may not last much longer. IBD’s analysis of the historical price action for MARA stock shows shares typically pull back once they are more than 50% above that 50-day moving average.
That makes a pullback here in comparison well overdue for a stock that is up 152% so far this month alone.
Traders with hefty profits who are bullish on the stock don’t necessarily need to sell their entire positions. Locking in some profits into strength is always prudent position management.
After locking in partial profits into strength, traders can use a downside reversal as another signal to trim their positions. Waiting for a close below the prior day’s bar is another way to lock in gains at elevated levels.
A close below the 10-day moving average is another level technical traders can use for their exit strategy. This is especially helpful for those who are trying to hold for a huge move.
But keep in mind that shares are some 35% above their 10-day line. Traders would need to be willing to sit through a sizable pullback before that sell signal even gets triggered.
MARA Stock Fueled By ETF Speculation
Investors are fueling MARA stock and other crypto-related trades at a time when many on Wall Street are speculating the imminent regulatory approval of ETFs that track the spot price of bitcoin.
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That approval is expected to bring a wave of institutional investors into the crypto market as they in turn offer their customers exposure to securities tied to digital currencies.
The surge comes as investors look toward prospects for bitcoin in 2024, anticipated to bring several catalysts to the cryptocurrency market. One such catalyst is a supply shock via the decrease in rewards for bitcoin miners called “The Halvening.”
This event will see the reward for bitcoin miners cut in half. It’s a measure built into bitcoin meant to cut down on inflation. The halvening also helps incentivize the bitcoin network to focus on transaction fees rather than mining.
Crypto bulls say the halvening is set to make supply scarcer at a time when demand from institutions is set to increase.
MARA stock derives its revenue from calculating proof-of-work for transactions that are validated and added to the blockchain.
Follow Mike Juang on X at @mikejuangnews and on Threads at @namedvillage
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