Riot Platforms stock boosted by surging Bitcoin price

Riot Platforms (RIOT) is a top technology company in the Bitcoin mining industry, where it operates some of the biggest operations in Texas. Its Rockdale facility is the biggest BTC mining facility in North America.

Riot has also become one of the top holders of Bitcoins in corporate America with 10,247 coins valued at $743 million. 

Like other companies in the sector, the company makes money by mining and selling coins to either exchanges or in the over-the-counter (OTC) market. It also benefits when the price of Bitcoin is rising since it boosts the value of its holdings.

Riot Platform made headlines a few months ago when it made a bid for Bitfarms, a Canadian mining company for $900 million. This acquisition was intended to make it the biggest miner in the world. It also wanted the buyout to help it to diversify its business geographically. 

Like other Bitcoin mining companies, Riot Platforms has gone through a mixed period this year. It has benefited from higher Bitcoin prices and rising demand from ETF providers like Blackrock and Fidelity. 

On the other hand, the company has faced challenges from the April halving event that reduced the amount of Bitcoins that companies mine. 

RIOT stock was trading at $12.25 on Thursday, while the HypeIndex metric rose to 122%. 

Positive hype

• RIOT’s hype has been driven by the performance of Bitcoin, which jumped to a record high of $66,000 on Wednesday. Higher BTC prices mean that its revenues will also do well.

• Bitcoin jumped after the US elected Donald Trump as the next president. Trump is viewed positively in the industry because he has pledged to implement friendly regulations when elected.

• Bitcoin has more upside potential because it has formed an inverse head and shoulders pattern. It has also formed a golden cross chart pattern, which will lead to more gains in the long term. 

• Riot Platforms will benefit from the upcoming Federal Reserve interest rate decision, in which the bank is expected to cut interest rates by 0.25%. Bitcoin and other riskier assets do well when the Fed is dovish. 

• The ten analysts tracking the company have a bullish rating on it. The average stock estimate is $16.45, much higher than the current $12.25. This implies a 36% increase from the current level.

• Many Wall Street professionals are highly bullish on Bitcoin, with many of them expecting it to rise to $100,000.

• Riot Platforms has a strong balance sheet with over $590 million in working capital, which is made up of $355 million in cash and $190 million in securities.

Negative hype

• Riot Platforms has continued to report weak mining numbers after April’s halving event, which reduced the block rewards.

• The company published relatively weak financial results. Its revenue came in at $84.8 million after it mined 1,104 coins during the quarter. 

• Riot is spending more money to mine a Bitcoin. The cost jumped to $35,376 in the third quarter. Its engineering revenue was $12.6 million and its mining revenue stood at $67.5 million. 

• RIOT still generated a big loss of over $154 million during the quarter.

Riot Platforms stock outlook

The future of the RIOT share price will depend on the performance of Bitcoin. If Bitcoin recovers, there are high chances that its surge will continue.

On the weekly chart, the stock has formed an ascending double-top pattern, a popular bullish sign. In most cases, a double-bottom leads to more gains. 

The Relative Strength Index (RSI) and the MACD have also pointed upwards. Therefore, the stock will likely bounce back and retest the important resistance point at $20.45, the double-bottom’s neckline, which is about 70% higher than the current level.

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HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.

The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.