Riot Blockchain Inc (NASDAQ: RIOT) was showing continued strength in comparison to Marathon Digital Holdings, Inc (NASDAQ: 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 (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), 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.
The Marathon Chart: Like Riot, Marathon is in need of a pullback because its RSI is measuring in at about 74%. Marathon’s elevated RSI is likely the reason the stock was showing some weakness on Wednesday.
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.
See Also: Bitcoin-Linked Stock Marathon Digital Is Surging: What's Going On?
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