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Bitcoin mining stocks have declined sharply from their peak levels earlier this year.
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Bitcoin’s daily chart is approaching a death cross formation.
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The U.S. dollar index is nearing a golden cross pattern.
Shares of Riot Platforms and Marathon Digital have remained under pressure as Bitcoin and other cryptocurrencies have pulled back. Riot shares were trading around $11.13 on Thursday, roughly 45% below their highest point this year. Marathon Digital shares fell to about $12.14, approximately 38% below their year-to-date high.
Bitcoin mining stocks have trended downward in recent days amid renewed concerns across the crypto market. The group’s declines have tracked Bitcoin’s retreat from the year-to-date high near $31,000 to the mid-$20,000s.
Worse outcomes are possible: Bitcoin appears set to form a death cross on the daily chart, a technical signal that occurs when the 50-day exponential moving average crosses below the 200-day exponential moving average. Historically, the death cross often precedes further downside momentum.
At the same time, the U.S. dollar index (DXY) is approaching a golden cross, suggesting potential strength for the dollar in the near term. If the dollar index completes this move, it could push above the 106 level. Bitcoin often moves inversely to the dollar, so a stronger dollar could act as additional headwind for BTC.
The DXY’s rise reflects growing investor expectations for a more hawkish Federal Reserve after several unexpectedly strong U.S. economic releases. For example, the services PMI showed faster expansion in August, reinforcing the outlook for sustained monetary tightening.
From a price-pattern perspective, Bitcoin has also developed what resembles a bearish flag: a sharp decline followed by a period of consolidation. In technical analysis, a bearish flag frequently precedes a continuation of the prior downtrend.
Given these signals, there is an increased probability of a bearish breakout for Bitcoin. Should that occur, a key support to watch is the $20,000 level. A decline toward that area would likely weigh further on mining equities such as Riot Platforms, Marathon Digital, and Argo Blockchain.
One major catalyst that could alter this outlook is a decision by the U.S. Securities and Exchange Commission regarding approval of a spot Bitcoin ETF. A favorable ruling could boost demand for Bitcoin and relieve some pressure on mining stocks, while a rejection or delay could exacerbate the current pullback.