Should I buy Marathon Digital (MARA) stock as it tests key resistance?

  • Bitcoin mining stocks experienced a positive breakthrough this week.

  • The share price of Marathon Digital reached its highest point since November.

  • The future price action will depend on the price action of Bitcoin.

The stock price of Marathon Digital has surged to its highest level since November 2022 as Bitcoin and other cryptocurrencies have made a comeback. MARA shares reached a high of $12.75, which means that they have increased by more than 319% from their lowest level in December. Other bitcoin mining companies in the industry, such as Riot Platform and Hut 8 Mining, have also seen a surge in their stock prices.

Bitcoin mining stocks jump

The main reason why the stock price of MARA has soared is because the price of Bitcoin has neared its highest point this year. This rebound happened as the crypto fear and greed index soared to the level of greed.

Most analysts believe that the ongoing trend of traditional finance (TradFi) is the main driving factor for Bitcoin prices. TradFi refers to a situation where traditional finance companies move to the crypto industry.

On Friday, Blackrock, the world’s largest asset manager, announced that it had applied for the iShares Bitcoin Trust with the SEC. This will be an ETF tracking the spot Bitcoin price and will be similar to the Vanguard Gold Trust.

Other large companies in the industry also unveiled their Bitcoin ETF filings. They included companies like Invesco and WisdomTree. Analysts believe that the SEC will come under pressure and allow these funds this time.

Another TradFi news was that Deutsche Bank applied for a crypto custody license in Germany. Credit Agricole, a large French bank, also received its custody license. These banks hope to take care of wealthy Europeans seeking access to the industry.

Therefore, the stock price of MARA is soaring because its business thrives in a period when the price of Bitcoin is thriving. Its future price action will depend on whether Bitcoin moves above $31,000. This is an important level since it is the upper side of the double-top pattern. As such, if it rises, it means that the double-top pattern has been invalidated.

MARA stock price forecast

The daily chart shows that the stock price of Marathon Digital has been in a slow bullish trend in the past few months. The shares consolidated at around $10 in the past few weeks. They then moved slightly above the key resistance point at $12.85, the highest level on April 18. The price was along the upper side of the ascending triangle pattern.

The share price of MARA has jumped above the 25-day and 50-day moving averages. Therefore, while the outlook is neutral, the stock will likely have a bullish breakout as buyers target the next key resistance point at $15. A drop below the support at $10.90 will invalidate the bullish view.

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