On Friday, Bitcoin had a major bounce, and this follow-through has continued. I see Bitcoin as the ultimate Risk-On asset and as a barometer of risk sentiment for the entire market. There are some stocks in the digital asset space that are significantly oversold, and I like them right now.

I don’t know a lot about the ins and outs of crypto. But our resident crypto expert Jake McCarthy knows almost everything there is to know! In fact, Jake has been sharing his knowledge with me after buying his first bitcoin almost 9 years ago. 

He lives and breathes the crypto market, and has mentoring sessions for an hour every day with subscribers! 

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.

Looking at the stock chart, you can see this has been in a nasty downtrend for the last 3 months. 

If you have been watching crypto at all lately you will see that the market has bounced strongly yet the stocks in the sector have lagged.  

And looking at the charts even closer, there was a double bottom followed by a pennant breakout to the upside.  

These two combo patterns are showing the bulls are here to stay, so therefore, I am betting this will be a “catch up week” for those stocks and MARA could be a leader there.

Now, if I am wrong I think Bitcoin will drop under $36k and MARA will drop under $20. I want to set my stop loss if either of those things happens.  

On the upside, I think MARA can trade near $28 on the upside as my first goal and $30 as the 2nd target.  

Why are these my target levels?  

Those correspond to the upper limits of the Keltner channels right now. 

My Trade Plan:

• Stop: Under $20
• Target 1: $28
• Target 2: $30

My Trade #1 (spicy):

• Buy MARA calls
• Expiration: Feb 18 2022
• Strike: $23
• Price: near $2.20

HUT

HUT 8 MINING CORP (HUT) is another Bitcoin miner, 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 area. The stock has been steadily grinding higher over the past couple of weeks, and I wouldn’t be surprised with a push above $8. 

OSTK

Overstock (OSTK) not only has exposure to online retail but also to blockchain technology and cryptocurrency trading platforms. 

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 around $50 as the bulls are trying to find a bottom.  

I like it because it is down more than 50% off its highs and has been trending higher over the last couple of weeks. If it holds here, I think we could see a 10-30% move the upside in a very short period.

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 have finally shown some strength since last Friday.

My 3 favorite Blockchain-related stocks are MARA, HUT, and OSTK. I love how the technicals are setting up at these levels, especially if the price of Bitcoin can continue higher!