Top Mining Stocks to Watch in Q4

The fourth Bitcoin halving on April 19 has shaken up the mining scene, slashing rewards from 6.25 BTC to 3.125 BTC. After peaking at $73,794 in March, Bitcoin’s price has now settled between $68,500 and $61,200, with hash prices ranging from $47.88 to $53 per petahash per second (PH/s).

Despite a tough market, marked by $12 billion in short positions against various cryptocurrency firms, some Bitcoin miners still show potential as solid investments, according to a report by Markus Thielen from 10x Research. Thielen notes that while the market remains complicated—largely due to hedge funds and other big players betting against the sector—select Bitcoin miners could still have promising prospects.

Here’s what’s the actual scenario for a Bitcoin rally in Q4.

Spotting Key Market Trends

In 2024, 10x Research has been quick to predict major market shifts, including Bitcoin’s rise to $70,000 and its later drop to $50,000. Thielen explains that the Bitcoin buying surge in Q1 was mostly driven by hedge funds taking advantage of arbitrage opportunities linked to Bitcoin ETFs rather than genuine long-term investment, a trend that influenced many of their predictions.

Although 10x Research successfully identified several market moves, such as Ethereum’s 30% drop, predicting the performance of Bitcoin miners has proven more difficult. Miners are affected not only by Bitcoin’s price changes but also by external factors like rising operational costs and energy expenses. While there were early expectations that miner liquidations would push prices down, the actual declines were not directly tied to these events.

Is a Bitcoin Rally on the Horizon? Watch for Bearish Crossovers

Thielen suggests that there are no strong signs of a long-term downturn until a bearish crossover occurs. Historically, these crossovers are followed by accumulation phases, where investors see value in buying Bitcoin at lower prices, often leading to price increases.

Spotlight on Bitcoin Mining Stocks

Despite declining revenues in the mining sector, 10x Research sees potential in selective Bitcoin mining stocks. The firm believes some of these stocks may already have lower earnings factored in, leaving room for growth if Bitcoin rallies again.

For example, CleanSpark’s share price jumped 39% in just two weeks after being highlighted in 10x’s October report, showing that well-timed investments in mining stocks can still yield significant returns.

Preparing for Q4: What’s Coming?

Looking ahead, Thielen believes that if Bitcoin breaks above the $70,000 mark, it could spark a significant rally in mining stocks. As the market prepares for possible Q4 movements, investors should keep an eye on these opportunities, as there’s potential for narrowing valuation gaps and achieving substantial returns, even amid broader market uncertainties.

What do you think? Will Bitcoin miners defy the odds and surge in Q4?