BitMine stock eyes parabolic move, analyst expects ETH surge

BitMine stock price continued its consolidation as traders waited for the outcome of a crucial shareholder vote and after Standard Chartered analysts delivered a bold Ethereum prediction.

BitMine, which is associated with Tom Lee, was trading at $31.60, a level it has remained at in the past few days. This price is slightly above the key support level at $28.75, where it formed a double-bottom pattern.

BitMine stock will react to the outcome of a major shareholder vote that ends on Tuesday. Shareholders are voting on whether to increase the number of authorized shares from the current 500 million to 50 billion, a move that may lead to substantial dilution over time.

Lee has argued that the goal is not to dilute the shares held by Peter Thiel, Cathie Wood, and Jonathan Bates. Instead, he argues that the increase will provide the company with the cash it needs for strategic acquisitions, to enable selective at-the-money capital raising, and to accommodate future share splits.

The company also argues that it will soon reach the current authorized share limit, implying that it may cease accumulating more Ethereum (ETH) to achieve its target of owning 5% of the market capitalization. 

There are signs that the BMNR stock price will exhibit elevated volatility over the next few days as investors react to the vote results. Data compiled by Yahoo Finance indicate that implied volatility has risen to 97%, close to its historical high of 103%.

On the positive side, BitMine has begun monetizing its Ethereum holdings by staking tokens valued at over $3 billion. It aims to eventually stake all of its Ethereum coins, meaning that it will earn over $500 million a year once it reaches its target of owning 5% of the market cap.

Also, Standard Chartered analysts believe that Ethereum has numerous catalysts that will push it to $7,500 over time. A move to that level would value BitMine’s Ethereum hoard at over $32 billion.

BitMine stock price technical analysis 

The eight-hour chart indicates that the BMNR stock price has been range-bound over the past few weeks. A closer look shows that it has formed a double-bottom pattern at $28.76 and a neckline at $41. 

Therefore, this pattern means that bears have been hesitant to place trades below that level. As such, the most likely scenario is a rebound as the bulls target the neckline at $41.2. A move above that price will indicate further gains, potentially to $50 or above.