I know nothing about crypto. But our resident crypto expert Jake McCarthy knows almost everything there is to know! In fact, Jake has been teaching this old dog a few new tricks with his knowledge after buying his first bitcoin almost 9 years ago. 

He lives and breathes the crypto coin market, and shares his knowledge and views for an hour every day live! That being said, I still focus on what I’ve been doing for over 20 years, and that’s trading stocks with great technical setups. 

Some of these blockchain-related stocks have been significantly beaten down over the last couple of months and now might present a great buying opportunity. Despite not being a crypto expert, I know a great technical setup when I see one, and I have 3 blockchain-related stocks that could be poised for a significant bounce in the short term. 

MARA

I liked this stock at these levels already. But it turns out that this is also one of Jake’s favorites in the crypto space. Marathon Digital Holdings, Inc. (MARA) operates as a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets in the United States. 

MARA has contracts with Bitmain to purchase bitcoin miners and with Compute North to host its miners at multiple locations, the majority of which are wind and solar farms operated by one of the largest renewable energy power providers in North America.

Technicals

MARA hit a high of $80 back in November and since then has sold off significantly. It is now down over 55% from those levels and is trading around $34. This is a significant level of interest for me. MARA has gone almost straight down with few significant bounces, and $33 is a MAJOR prior support level. The last time MARA traded down to $33 in October, it exploded above $80 in just a few weeks.  

Thus if MARA can continue to base here, I will be looking to get long the stock for a move to $40+ and even $50. Being a bitcoin miner, naturally, this stock is highly dependant on moves in the price of bitcoin.

HUT

HUT 8 MINING CORP (HUT) is another Bitcoin miner, and I’ve started to buy stock recently. The company engages in industrial-scale bitcoin mining operations. 

HUT traded above $16 in October. It has since sold off over 50% and is trading around the $7.50 area. This area was a previous area of major support before the run above $16.

I’m buying this base around the 200-day moving average and am starting to add to it! So long as we don’t see a big break below $7, I will keep adding to it. I like this one a lot. If this base holds, I can see HUT pushing towards $9 and even through $10.                                                                                                                                                                                                                                                                                                            

OSTK

Overstock (OSTK) not only has exposure to online retail but also to blockchain technology and cryptocurrency trading platforms. It has come into a significant support area, and I really like the stock here.

Fundamentals

Overstock.com (OSTK), Inc. operates as an online retailer in the United States. It operates through retail, tZERO, and Medici Ventures segments. The company offers furniture; and home decor, including area rugs, bedding and bath, home improvement, kitchen and dining items, and other related products. 

Further, it focuses on the development and management of financial applications of blockchain technologies. 

Technicals

Overstock.com Inc (OSTK) has been oversold from the highs near $110, and is currently trading in the $60s as the bulls are trying to find a bottom.  

I like it because it is down 40% off its highs in a relatively short period of time, and it is consolidating at a major support level. It didn’t follow the market higher last week, but if it holds here, I think we could see a 10-30% move the upside in a very short period.

If OSTK can continue to form the ‘W’ bottoming pattern, I would expect to see the bulls push above the 100 and 200 hourly moving average.  

From a technical perspective, the $70 and $80 level seems to be an area the bulls might target to the upside. They are prior pivot levels where the bears stepped in and sold off OSTK with momentum to the downside.

The Trade

I took the trade last week. I bought 40 of the Jan 22 $60 calls for $6 with 30 days to expiry. Since then, the stock has continued to consolidate around the $60 area, breaking down to $59 yesterday and I’m down slightly on the position. I expect it to break out in the next couple of weeks if it is going to go at all. Naturally, the quicker the move happens, the better it will be for my position.

Bottom Line

While I’m no Crypto expert like our analyst here at Raging Bull, Jake McCarthy, I know a good technical setup when I see one. Bitcoin and Blockchain related stocks have taken a beating over the last couple of months and now are approaching much better value and areas of major support. 

My 3 favorite Blockchain-related stocks are MARA, HUT, and OSTK. I’ve already started positions in HUT and OSTK, and am continuing to stalk MARA for an entry. I love how the technicals are setting up at these levels!