Riot Blockchain Struggles At Must-Hold Level As Bitcoin Fails To Buck Its Trend: What’s Next?

Riot Blockchain, Inc (NASDAQ:RIOT) was falling more than 9% on Thursday, likely due to the fact that Bitcoin (CRYPTO: BTC) has been unable to break up from a downtrend the crypto has been trading in since reaching a Nov. 10 all-time high of $69,000.

Riot is not only affected by the cryptocurrency sector but also by the overall markets and in the afternoon the Nasdaq was struggling to regain a psychological support level at $16,000.

The stock is not only down over 48% since hitting a high of $46.28 on Nov. 15, but Riot has lost almost 70% of its value since Feb. 17, when it hit an all-time high of $78.30.

Now trading near the $24 level, traders and investors may be wondering if the cryptocurrency miner is a good buy for a long-term hold. Riot is in danger of falling through a key level, however, and if it breaks down bearishly to close a trading session below support at $23.93, further downside could be in the cards.

See Also: As Bitcoin and Ethereum Rise After Fed Ramps up Tapering, Here’s What 5 Analysts Are Saying

The Riot Chart: Riot has not closed a trading session below the key support zone since May 21, after the stock plummeted in a downtrend from its all-time high. Riot is now trading in another downtrend and has made a consistent series of lower highs and lower lows, with the most recent lower high and lower low both created on Wednesday when the stock fell to $23.04 before bouncing up to the $26.61 level.

On Thursday, Riot was trading lower on lower-than-average volume, which indicates the bearish pressure is not strong and the stock may trade sideways for a period of time. As of early afternoon, only about 5 million Riot shares had exchanged hands compared to the 10-day average of 14.75 million.

Riot’s relative strength index (RSI) is registering in low at about 35%. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders. Riot’s RSI could drop further before the share price bounces, however, like it did on July 20 and Sept. 21.

Riot is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading about 23% below the 50-day simple moving average, which indicates longer-term sentiment is also bearish.

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  • Bulls want to see Riot hold above the key level and then for big bearish volume to come in and push the stock up to make a high above Wednesday’s high-of-day. The stock has resistance above at $27.46 and $29.73.
  • Bears want to see big bearish volume come in and drop Riot down below the key level, which would indicate the bears are in full control of the stock. Below the area there is support at $20.68 and $17.90.