BitMine stock eyes an explosive surge as Ethereum price forms a bullish pattern

BitMine stock price remains in a deep slumber this month, continuing a trend that started in February.

BMNR was trading at $21.4 on Wednesday, inside a range it has been stuck in since February 5 this year.

It remains much lower than the all-time high of $161. This article explores why the stock may rebound soon.

BitMine stock price chart analysis points to a rebound 

The daily chart shows that the BMNR share price has remained in a tight range in the past two months.

It is slightly above the important support level at $18.27, a level it has failed to move below since February.

Most importantly, the stock has formed a falling wedge pattern, which is characterised by two descending and converging trendlines.

This pattern often leads to a strong bullish breakout, which is normally confirmed when it moves above the upper side.

BitMine has remained above the upper side of the wedge pattern and is now attempting to move above the 50-day Exponential Moving Average (EMA). 

The two lines of the Percentage Price Oscillator (PPO) have formed a bullish crossover pattern and are about to cross the zero line.

Also, the Relative Strength Index (RSI) indicator has jumped above the oversold level of 24.50 in February to the current 50.

There are also signs that the stock is now in the accumulation phase of the Wyckoff Theory.

This phase is normally followed by the markup phase, which is characterised by more demand.

Therefore, the stock will likely have a strong bullish breakout in the coming weeks, potentially to the important resistance level at $30.

More gains may see it keep rising to the psychological level at $50, which is about 135% above the current level.

BMNR stock price chart | Source: TradingView 

Ethereum price recovery is possible 

The main catalyst for the BMNR stock price is Ethereum, which is showing signs of recovery.

This is important as the company has become a big Ethereum holder.

It has added over 224k ETH coins in the last 30 days and now holds over 4.595 million coins worth over $10 billion.

It recently bought coins directly from Ethereum Foundation in an over-the-counter (OTC) transaction.

The company’s holdings are now equivalent to 3.8% of the total supply, a big achievement since it started accumulation mid-last year.

This accumulation will continue as the company aims to get to 5% ownership.

There are signs that the Ethereum price will rebound as it has formed an inverted head-and-shoulders pattern, a common bullish reversal sign in technical analysis.

It is now in the right shoulder section, meaning that a rebound is possible.

The Relative Strength Index (RSI) has moved from the oversold level of 30 to the current 37, while the two lines of the Percentage Price Oscillator (PPO) are narrowing.

Therefore, the coin may rebound in the coming weeks, potentially to the key resistance level at $3,000, which is along the 50% Fibonacci Retracement level. This price is about 35% above the current level.

On the flip side, a drop below the right shoulder section at $1,755 will invalidate the bullish outlook.

An Ethereum rebound will be highly bullish for BitMine because of its large holdings.

ETH price chart | Source: TradingView 

BitMine may also benefit from the other parts of its business. It also holds over 100 BTC, meaning that it will benefit if Bitcoin rebounds.

Also, the company has made a large investment in Beast Industries, which may be much bigger in the future.