Riot Platforms stock price could slip by 20% as BTC double tops

Riot Platforms (NASDAQ: RIOT) stock price continued its downward trend as Bitcoin formed a dangerous pattern. The shares plunged to a low of $13 on Wednesday, the lowest level since July 5th. It has dropped by more than 36% from its highest level this year.

Bitcoin double-tops

Riot Platforms, Marathon Digital, Hut 8 Mining and other Bitcoin mining companies have a close correlation with BTC. In most periods, they rise when Bitcoin rises, which explains why they have surged by triple digits this year.

Now, there are concerns that Bitcoin price is about to have a strong bearish breakout. In the daily chart, BTC has formed a double-top pattern at ~$32,000 and a neckline at $25,000. In price action analysis, this pattern is usually one of the most popular bearish signs.

To make matters worse, Bitcoin has constantly remained below the resistance level at $30,000. It has also failed to react to some important crypto news, including the launch of the first Bitcoin ETF in Europe and the recent Ripple victory in an American court.

Bitcoin has also dropped below the important 50-day moving average on the daily chart, signaling that bears are taking control. Therefore, the path of the least resistance for Bitcoin price is downwards, with the next level to watch being at $25,000. 

If this happens, Riot Platforms stock price will also continue falling because of the close correlation. The most recent financial results by Riot Platforms showed that the company’s revenue rose by just 5% to $76.7 million in Q2. It produced 1,775 Bitcoins during the quarter, up from 1,775 in Q2’23.

In the long-term, my view is that Riot Platforms and Marathon Digital are positioned well as Bitcoin goes mainstream and its price recovers. The same is true for other assets exposed to Bitcoin like MicroStrategy and ProShares Bitcoin Trust (BITO).

Riot Platforms stock price forecast

The daily chart shows that the RIOT share price has made a bearish breakout in the past few days. It dropped below the 50-day moving average and the crucial support level at $14.46, the highest level on April 18th. 

Riot also dropped below the first support of the Woodie pivot points at $13.74 while the Relative Strength Index (RSI) and the Stochastic Oscillator have drifted downwards. It also moved below the Ichimoku cloud.

Therefore, the outlook of the shares is bearish, with the next support level to watch being at $10, which is ~20% below the current level.