Marathon Digital Holdings (NASDAQ:MARA) is profitable despite the recent liquidation in its stock, according to Jefferies analyst Jonathan Petersen. The stock of the bitcoin miner is expected to rise about 158% in the next 12 months, thanks to the bullish projection of bitcoin.
The stock upgrade by Jefferies happens when Marathon has been ramping up its mining infrastructure. In December, the firm announced that it would have operational miners producing about 23.3 exahashes per second by next year. The miner also purchased a record number of ANTMINER S19 XP- 140TH/S equipment last year to expand BTC mining operations.
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However, the global shortage of semiconductor chips poses a challenge to the crypto mining firm. TSMC has reported dwindling stocks of the key commodity used in production ASIC miners, which could continue hitting stock.
MARA sits at a key support
A closer look at the technical outlook shows that MARA is at a crucial support level after shedding off a whopping 290% since bitcoin began retreating in November. The stock is also trading below the 50 moving averages and the 100 moving averages, acting as potential resistance to the upside. Whereas the current support level could be a great buy entry for MARA, headwinds including the rout in cryptocurrencies and chip issues could force a plunge below.
Final thoughts
If the current support level holds and the trend reverses to the upside, it could open a buying opportunity for MARA. We can only confirm a change of sentiment with a bullish price action signal and once the two moving averages join. Still, MARA stock is largely influenced by the price of bitcoin, which has seen volatile movements lately. Thus, if crypto remains subdued, MARA could break below the key support. For now, we urge patience until we see a proper rebound to consider a buy trade.
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