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Bitcoin Mining Stocks Surge Over 5% as Crypto Sentiment Improves
Bitcoin mining stocks experienced a notable increase of over 5% in the pre-market session, driven by an improvement in the crypto fear and greed index, which exited the fear zone.
Mara Holdings Leads the Pack
Mara Holdings, the largest miner by market cap, saw its stock rise by nearly 6%, reaching a high of $16.7. Similarly, Riot Platforms’ stock increased by 5.3%, and Argo Blockchain climbed by 5%. Other companies such as CleanSpark, TeraWulf, and Core Scientific also experienced similar price movements.
Improved Sentiment in the Crypto Industry
This recovery in mining stocks occurred as sentiment in the crypto industry improved. The closely watched crypto fear and greed index rose to a neutral point of 44, its highest level in nearly two weeks. Most cryptocurrencies were in the green, with Bitcoin rising to over $63,000 and Ethereum moving to $2,500. Over the past seven days, Bitcoin and Ethereum have risen by over 8% and 4%, respectively.
Correlation with Stock Market Gains
The price action in the crypto market coincided with a strong comeback in the stock market. The Dow Jones futures jumped by 1.33%, while the tech-heavy Nasdaq 100 index rose by 417 points. Meanwhile, government bond yields and the U.S. dollar index retreated.
Federal Reserve’s Interest Rate Cuts
The Federal Reserve recently decided to slash interest rates by 50 basis points as part of its efforts to engineer a soft landing. It also hinted at more potential cuts if the U.S. continues to report weak job numbers. Other central banks have also started cutting rates. The European Central Bank has delivered two cuts, while the Bank of England suggested it might resume cuts in the final two meetings of the year.
This marks a new phase for global central banks, which previously raised interest rates to multi-decade highs in response to post-pandemic inflation. Risky assets, such as cryptocurrencies, often perform well when central banks adopt a dovish tone, as funds tend to move away from low-yielding government bonds.
Future Outlook for Bitcoin Mining Stocks
Despite the recent gains, it is too early to predict whether the uptrend in Bitcoin mining stocks will hold. Their price action will largely depend on how Bitcoin trades in the coming months.
On a positive note, Bitcoin has avoided forming a death cross chart pattern. Instead, the price has moved above the 200-day and 50-day moving averages, which is a positive sign. Additionally, Bitcoin has formed the three white soldiers candlestick pattern, indicating three consecutive bullish candles. Bitcoin is also approaching the upper side of the descending channel. A break above this level could signal more upside, which would be bullish for mining stocks.
Bitcoin mining stocks experienced a notable increase of over 5% in the pre-market session, driven by an improvement in the crypto fear and greed index.
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