BitMine Immersion (NASDAQ:BMNR) has pulled back slightly from its September highs as recent momentum stalled. After peaking at $28.76, the stock has dropped to $26.27. Even so, it has formed a golden cross, a pattern that traders often read as a sign of further gains, while the company’s Ethereum buying spree nears a potential inflection point.
BitMine Immersion Ethereum Buying is Nearing a Major Milestone
Tom Lee’s Ethereum accumulation vehicle reached a major milestone last week when it crossed 6 million. This figure means that the company now holds about 4.8% of all ETH tokens in circulation. If its weekly Ethereum buying trend continues, the company will cross the 5% milestone this month.
The company’s Ethereum holdings are now valued at over $16 billion, slightly higher than its market capitalization of $15.8 billion. In addition to this, the company also holds other assets, including 213 Bitcoin (CRYPTO: BTC), $180 million stake in Beast Industries, and a $115 stake in EightCo (NASDAQ:ORBS). It also has over $672 million in cash and marketable securities.
BitMine stock will benefit from the completion of Ethereum buying for two main reasons. First, it will stop diluting its shareholders through its at-the-market offerings, which have helped it to accumulate ETH without using debt.
Second, it will help it to maximize its Ethereum staking. It has now staked over 5.1 million tokens, with the company estimating that its annualized staking revenue stands at about $358 million. The figure will jump after it stakes all its holdings.
BitMine has little operational costs, with estimates showing that it has fewer than five employees. Its other costs are the dividends to its preferred shareholders, which are worth about $33 million annually. As such, other than taxes, most of its staking revenue will be profit, which it can use to repurchase its stock.
BitMine will also benefit from Ethereum’s price action. Citigroup (NYSE:C) estimates that the coin will jump to over $3,000, while Lee believes that we are on the verge of a renewed bull run.
BitMine Stock Formed a Golden Cross
BMNR stock chart | Source: TradingView
On the charts, the BMNR stock has made a series of higher highs and higher lows in the past few months. Most notably, it formed a golden cross pattern on September 28 as the 50-day moving average jumped above the 200-day average. This pattern usually leads to more gains over time.
The stock has also formed a bullish flag pattern, which happens after a big jump is followed by a pullback. It has completed filling the fair value gap that formed on September 21.
These technicals suggest that the stock may eventually rebound to the psychological level of $30. A move above that price will point to more gains towards $35.
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