Bitfarms, Ltd (NASDAQ: BITF) is Wednesday daytime, Bitcoin (Cryptography: BTC) and Ethereum (CRYPTO: ETH), down about 2% and 2.5%, respectively.
Blockchain infrastructure companies have been hit by the slump in the cryptocurrency market for the past month, and the end seems uncertain. Bitcoin and Ethereum fell by about 31% and 22%, respectively, from their November 10 highs, while Bitfarm lost more than half of its value from its November 10 highs of $ 9.36.
Stock prices are on the decline, but there may be signs of a rebound. Bitfarms has entered the oversold territory on the daily chart, with the Relative Strength Index slightly above the 30% level.
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Bit Farm Chart: Bitfarms has created a consistent set of lows and lows in its descent. The latest low was printed on December 7th at $ 6.66 and the latest low was created on Wednesday at $ 4.61. Stock prices need bounces, even if they just print lower highs before they fall further, and given the oversold condition of Bitfarms, bounces seem imminent.
On Wednesday, Bitfarm was rebounding from the $ 4.59 support level, and if the stock closes the trading day near the $ 4.80 level, it will print a hammer candlestick. This type of candlestick, if at the bottom of the trend, may indicate that the card has an upward reversal.
Whether Bitcoin can reverse that trend may depend on which direction Bitcoin and Ethereum are heading for the rest of the week. Mining stocks often react to the price of the top cryptocurrencies, so traders who have not yet held a position on the bit farm have time to enter the stock before the uptrend begins.
Bitfarms are trading below the 8-day and 21-day moving averages (EMA), and the 8-day EMA tends to be below the 21-day, both of which are bearish indicators. Equities are also trading below the 50-day moving average, indicating that long-term sentiment is bearish.
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- The Bulls hope that Bitfarm is above the $ 4.59 level, with a bullish volume and pushing stocks above the higher resistance zone of $ 5.49. This allows Bit Farm to regain support with an 8-day EMA. Further resistance at $ 6.18 and $ 6.74.
- The bear wants to see a big bearish volume coming in and lowers the bit farm below the $ 4.50 level. This confirms that the downtrend has not yet been compromised. Below the level, there is support for $ 3.83 and $ 3.16.
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