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Bitcoin’s price rebound to $48,000 has positively affected crypto and mining stocks. Crypto stocks such as MicroStrategy (MSTR) and Coinbase (COIN) have been rallying over the last few days. Many mining stocks are also on the move.
Crypto traders are recovering, and professional traders are looking to add larger leveraged positions. Meanwhile, those with indirect exposure to Bitcoin are also cashing in.
MicroStrategy’s BET on BTC pays
MicroStrategy (MSTR), a software company viewed as a proxy for Bitcoin, has risen 9.95% to $646.32.
The business intelligence firm MicroStrategy and its BTC advocate Chairman, Michael Saylor, have become well known across the cryptocurrency sector for Saylor’s wild support for Bitcoin as a store of value and the massive amount of BTC the company has purchased in the last year.
Along with helping to educate the world about the promise of Bitcoin and blockchain technology, MicroStrategy has amassed a big Bitcoin portfolio. The firm bought an additional 850 Bitcoin for $37.2 million in January, according to a post by Michael Saylor, the company’s founder and chairman.
In January, @MicroStrategy acquired an additional 850 BTC for $37.2 million and now holds 190,000 BTC. Please join us at 5pm ET as we discuss our Q4 2023 financial results and answer questions about our #bitcoin strategy and business outlook. $MSTR https://t.co/j5SbcELsue
— Michael Saylor⚡️ (@saylor) February 6, 2024
The company now holds 190,000 BTC in its treasury as a way to hedge against inflation.
As a result, MicroStrategy’s stock price has become somewhat correlated with the price performance of BTC, and it has been observed moving in tandem with the top cryptocurrency.
The correlation between MSTR and BTC now stands at 0.89, as shown in the chart below.
MSTR/USD correlation with Bitcoin. Source: TradingView
The chart above shows that the MSTR price reached a high of $648.90 on Feb. 9, the same day as the high in Bitcoin above $$8,00. The price of MicroStrategy stock has increased by 30% over the last seven days.
Shares in crypto exchange Coinbase (COIN) increased by over 7.12% to $141.99 on Friday and were up 12% on the week.
Bitcoin mining stocks benefit from BTC price growth
Listed companies that specialize in Bitcoin and cryptocurrency mining have also benefited from the price growth in BTC.
Perhaps the most well-known Bitcoin mining firm is Riot Blockchain, a company that operates warehouses full of ASIC miners that help to process transactions on the network in return for BTC rewards.
RIOT/USD daily chart. Source: TradingView
Since hitting a low at $9.64 on Jan. 19, the price of RIOT has increased by 50% and reached a high of $14.79 on Feb. 9.
Marathon Digital Holdings is another company that focuses on Bitcoin mining and purchasing BTC with its treasury holdings.
Data from TradingView shows that after reaching a low of $14.62 on Jan. 19, the price of MARA has rallied 64% to a high of $24.36 on Feb.9, making MARA the top-performing Bitcoin mining stock over the past three weeks.
MARA/USD daily chart. Source: TradingView
Bitcoin bulls target a return to $50,000
Bitcoin’s rally has run the stiff overhead resistance at $48,800, which has resulted in a tough battle between the bulls and the bears.
The upsloping 50-day exponential moving average ($43,152) and the relative strength index (RSI) in the overbought zone indicate that the path of least resistance is to the upside. If bulls drive the price above $48,800, the price of the big crypto may accelerate toward $50,000. If this level is surmounted, the rally could reach $60,000 or an all-time high above $69,000.
BTC/USD daily chart. Source: TradingView
On the downside, if the price turns down sharply from the current level, it will indicate a possible consolidation between $45,000 and $48,800 for a few days. The short-term trend will weaken on a break below the 50-day EMA.
