BitMine stock forms a rare bullish pattern as short interest hits 6%

BitMine stock price remains in a tight range this week, even as Ethereum dropped to a multi-week low of $1,880.

The BMNR stock was trading at the key support level at $20, down by almost 90% from its highest level in July last year.

BitMine stock has wavered as the company has continued accumulating Ethereum (ETH). Data shows that the company has bought over 168,000 Ethereum tokens in the last 30 days, bringing the cumulative total to 4.7 million, which are currently worth over $8.3 billion.

The company’s goal is to ultimately own 5% of ETH coins and generate a monthly return through staking.  Data compiled by StakingRewards shows that the average staking return on Ethereum is about 2.9%, meaning that the company will be generating over $350 million in annual staking revenue.

BitMine also holds over $600 million in cash, which it has invested in short-term government bonds, which earn over 4%.

At the same time, Tom Lee has invested in other companies, including Beast Industries, the company owned by Mr. Beast. It offers numerous products, including chocolate bars and financial services. It recently acquired Step, a company that provides financial literacy solutions to young people.

BitMine has access to more money to make investments as its shareholders recently increased its authorized shares to 50 billion. This means that it may issue additional shares to make these investments. 

This performance, together with Ethereum’s track record of bouncing back, explains why top institutional investors have continued buying the stock. Some of the top holders of the BMNR stock are companies like Morgan Stanley, ARK Investment, BlackRock, Citadel, and Goldman Sachs. 

The main risk facing the BMNR stock price is the ongoing Ethereum price crash and the rising short interest. Short interest jumped to 6%, meaning that many investors anticipate it to keep falling. 

BitMine stock price technical analysis

The daily chart shows that the BMNR stock price has slumped in the past few months. This retreat has pushed it to move below all moving averages, a sign that bears have prevailed. 

A closer look shows that the stock has formed a giant falling wedge pattern. This pattern is made up of two descending and converging trendlines. A bullish breakout normally happens when the two lines are about to converge.

Therefore, the most likely BitMine stock price forecast is bullish, with the initial target being at $35, its highest level in January this year.