Digital Marathon Tops Higher As Bitcoin, Crypto Sector Holds Steady: What’s Going On? – Marathon Digital Holdings (NASDAQ:MARA)

Marathon Digital Holdings, Inc MARA rose over 6% after the market opened on Thursday before facing a group of sellers. The stock was faster Bitcoin BTC/USDwhich traded close to flat.

The cryptocurrency market has shown relative strength relative to the general markets in recent weeks, holding steady or moving slightly higher while the S&P 500 has been trading in a confirmed downtrend on the daily chart.

Cryptocurrency miners like Marathon Digital are influenced by both the crypto sector and the general markets. With Bitcoin showing strength, Marathon Digital has rallied over 42% since September 23, but on Thursday the stock rejected an upper trendline due to general market weakness.

The upper trend line could be the neck of an inverted head-and-shoulders pattern. An inverted head and shoulders pattern can either be a powerful reversal indicator when found at the bottom of a downtrend or a continuation pattern found in an uptrend.

The pattern is formed when a security forms a rounded or V-shaped trough and then rises (right shoulder) followed by a second deeper decline and accompanying rise (head) and then by a third bottom and rise that is shallower than the second (left) shoulder ).

The inverse head and shoulders pattern has a neckline, which is drawn using a straight ascending, descending or horizontal trend line above the tops of the pattern.

When the security breaks through the neck on higher-than-average volume, it indicates that the pattern was recognized and a rally may follow.

• Aggressive bullish traders may choose to enter a security in a head-and-shoulders pattern on the rise after the third trough, with a stop below the lowest price at the bottom. More conservative traders can wait to enter a position on a breakout from the neck.
• Bearish traders may wait to enter a position if the security falls below the low of the second bottom, which negates the bullish head-and-shoulders pattern and indicates that an accelerated move to the downside may follow.

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Marathon Digital Chart: Marathon’s head-and-shoulders pattern has not been confirmed because the right shoulder is not complete. If Marathon digital continues to reject the possible descending neck of the pattern, traders and investors can look for a rounded retracement to take place, which could set up the second shoulder.

• If that happens, Marathon could reverse course into a strong uptrend. Either way, if the stock breaks out of the trendline on higher than average volume, an uptrend on the weekly chart could be in the cards.
• Marathon is already trading in an uptrend on the daily chart, with the latest high low formed on October 3 at $10.39 and the latest confirmed higher high printed at $11.83 the day before. If Marathon ends the trading day with a candlestick with an upper wick, the next higher high may have occurred, making it likely that the stock will trade lower on Friday.
• Marathon has resistance above at $14.56 and $19.51 and support below at $9.93 and $7.79.

See Also: Bitcoin, Ethereum Edge Higher, Dogecoin Slips: Analyst Says Apex Coin Fundamentals ‘Continue to Support Healthy Consolidation’

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