Bitmine stock eyes a breakout as Ethereum price forms a bullish pattern

Bitmine stock could be on the verge of a strong bullish breakout as the Ethereum price nears a strong bullish breakout to $5,000 and beyond.

BitMine’s BMNR share price has moved sideways in the past few weeks as Ethereum has remained below the all-time high. Its current price of $53 is much lower than its all-time high of $160.

In a statement on Monday, Sep. 29, the company said that it continued with its Ethereum (ETH) accumulation and now owns about 2.65 million in tokens. 

At the current price, these holdings are worth over $11 billion, much higher than its market capitalization of $9 billion. In a statement, Tom Lee, the company’s chairman, said:

“We continue to believe Ethereum is one of the biggest macro trades over the next 10-15 years. Wall Street and AI moving onto the blockchain should lead to a greater transformation of today’s financial system. And the majority of this is taking place on Ethereum.”

Ethereum price technicals point to a surge

The main catalyst for the BitMine stock price is that Ethereum, its main asset, could be on the verge of a strong bullish breakout, helped by its strong technicals.

The daily timeframe chart shows that the ETH price has recently pulled back from the year-to-date high of $4,950 on Aug. 24 to the current $4,170.

It has remained above the 50-day moving average and has retested the important support at $4,106, the highest point in December last year. This price was along the upper side of the cup-and-handle pattern, a common bullish continuation sign.

Ethereum has formed a bullish flag pattern, which is made up of a descending channel and a vertical line. This pattern is one of the most common continuation signs.

Therefore, the coin will likely have a strong bullish breakout, initially to the year-to-date high of $4,950, its highest level on Aug. 24.

A move below the lower side of the bullish flag at $3,930 will invalidate the bullish outlook and point to more downside.

Implications on the BitMine stock 

A strong Ethereum price rebound would be bullish for the BitMine stock price because its business is primarily to accumulate it. 

A surge to $5,000 would bring the value of its holdings to $13.25 billion, much higher than the current market valuation of $9.2 billion.

Another potential catalyst for the BitMine stock is that the company continues repurchasing its stock, which has helped it reduce its outstanding shares in the past few months.

Still, the main risk is that demand for treasury stocks has waned in the past few months, with popular names like Strategy and Metaplanet falling by over 30% from the year-to-date high.