What To Watch On Riot And Marathon Stocks As Bitcoin, Ethereum Fly Higher

Zinger Key Points
  • Riot and Marathon are due for a pullback because their RSI's levels are extended.
  • Both stocks are trading in strong uptrends, so a pullback to print a higher low is the most likely scenario.

Riot Blockchain Inc RIOT was showing continued strength in comparison to Marathon Digital Holdings, Inc MARA, with the former trading up about 5% in contrast to the latter, which was up just over 1%.

Both crypto mining stocks have behaved bullishly recently, trading in tandem with Bitcoin BTC/USD and Ethereum ETH/USD, which have reversed course into uptrends. Bitcoin has soared about 27% since July 13, while Ethereum has skyrocketed about 57% over the same time period, which makes it no surprise that numerous stocks related to the crypto sector have followed suit.

Looking back, the reversal to the upside in Bitcoin, Ethereum and the two crypto-related stocks began on July 1 and although momentum has come in over the past week, another pullback, at least to print a higher low is likely to come over the next few days.

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The Riot Chart: Riot's relative strength index (RSI) was surging to about 68% on Wednesday, which indicates a pullback is likely on the horizon. When a stock’s RSI reaches or rises above the 70% mark it becomes overbought, which can be a sell signal for technical traders.

Riot’s most recent higher low in its uptrend was printed on July 13 at $4.52 and the most recent confirmed higher was created at the $5.81 mark on July 8. If the stock closes the trading day near its opening price, Riot will print a doji candlestick, which could indicate the next higher high has been formed and the stock will trade lower over the coming sessions.

Marathon’s most recent higher low in its uptrend was printed on July 13 at $7.05 and the most recent confirmed higher high was formed at the $8.90 level on July 8.

On Wednesday, Marathon may have printed its next higher high at its high-of-day, which suggests traders can watch for the stock to print another higher low over the coming days, which could provide a solid entry point for bulls not already in a position.

Marathon has resistance above at $14.66 and $19.51 and support below at $9.93 and $7.79.

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