CleanSpark Inc. (CLSK), a prominent Bitcoin miner, has experienced a tumultuous year. Despite a remarkable 87% stock increase over the past year, the stock has recently taken a sharp downturn, falling 22.1% year-to-date and a staggering 30.48% in the last month alone. Worryingly, technical indicators suggest that the stock is on the verge of a ‘death cross,’ a bearish signal often associated with further decline.
A death cross occurs when a stock’s short-term moving average (like the 50-day average) crosses below its long-term moving average (like the 200-day average). This crossover indicates a potential shift in market sentiment, with selling pressure often intensifying. In CleanSpark’s case, the stock price has already fallen below both the 50-day and 200-day moving averages, trading at $8.68 while the averages stand at $14.24 and $14.07, respectively. This technical setup raises concerns about potential future losses for investors.
Despite this bleak technical outlook, CleanSpark continues to make strides operationally. In August, the company mined 478 Bitcoin, a slight decrease from July’s 494. However, CleanSpark also reported an average hashrate of 21.3 EH/s for the month, achieving a peak single-day production of nearly 18 Bitcoin. The company has ambitious plans for expansion, including an additional 65 MW of data center capacity scheduled to come online this month.
CleanSpark is actively expanding its operations, with ongoing developments in Georgia, Wyoming, and Tennessee. By mid-September, the company expects 50 MW from its Sandersville, Georgia expansion to be fully operational, with another 30 MW from a Wyoming facility also progressing. Despite these efforts, CleanSpark’s share price has been significantly impacted, potentially due to concerns surrounding Bitcoin’s volatile prices and the broader market environment.
While CleanSpark remains committed to growth, the stock’s technical setup paints a pessimistic picture. All major moving averages indicate a bearish signal, suggesting that CleanSpark’s recent downturn may persist. The looming death cross serves as a stark warning sign for investors, signaling potential for further decline in the stock’s value.
