JUST (jst) 
Popular Bitcoin mining stocks have formed the rare death cross pattern, indicating potential challenges ahead.
CleanSpark and Marathon Digital Form a Death Cross
Marathon Digital, the largest mining company in the industry, saw its stock drop to $13.75 on September 6, marking its lowest point since December of last year. This represents a 60% decline from its highest point this year, wiping out over $4 billion in value.
Similarly, CleanSpark shares plummeted to $8.39, the lowest level since February, and are down 66% from their peak this year. Its market cap has fallen from $5 billion in March to $2 billion.
Other Bitcoin mining stocks, such as Riot Platforms, Core Scientific, Cipher Mining, and Argo Blockchain, have also experienced declines.
Impact of the Death Cross Pattern
Most notably, both Marathon Digital and CleanSpark have formed a death cross pattern, where the 200-day and 50-day moving averages intersect. Historically, this pattern often signals further downside.
Riot Platforms formed a death cross on April 9, leading to a 40% drop in its stock, now at its lowest point since March 2023.
Factors Behind the Decline
The decline in mining stocks can be attributed to two main factors: low Bitcoin prices and weak production.
Bitcoin recently fell below $55,000, its lowest point since August 7. This marks a 25% drop from its highest point this year and a 15% decline from its August high. The ongoing sell-off has resulted in a series of lower lows and lower highs. Bitcoin is also approaching a death cross, suggesting bearish control. A drop below last month’s low of $49,000 could signal further declines.
Production Challenges for Mining Companies
Bitcoin mining companies are producing fewer coins than they did in August due to the halving event. Marathon Digital produced 673 coins in August, down from 692 in July and 850 in April. Similarly, CleanSpark produced 478 coins in August, a decline from 721 in April, while Riot Platforms mined 322 coins in August, down from the previous month. Other mining companies have reported similar declines in production.
The combination of lower Bitcoin prices and decreased production suggests that revenue for mining companies will continue to decline, while the mark-to-market value of their holdings will also decrease. Marathon Digital, Riot Platforms, and CleanSpark hold 25,000, 9,334, and 7,052 coins on their balance sheets, respectively.
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