Bitfarms stock price has gone parabolic in the past few days, soaring to a high of $2.90, its highest level since July last year and 350% above its lowest level this year. This surge has brought its market capitalization to over $1.6 billion.
Bitfarms stock price analysis
The daily timeframe chart shows that the BITF stock price bottomed at $0.6612 earlier this year and then started moving upwards gradually. This slow uptrend then went parabolic recently, when it jumped to nearly $3.
The jump accelerated after the company published its earnings and announced a strategic shift in its business.
BITF stock has crossed several important resistance levels, including at $2.75, the highest swing in November last year. It has now formed a golden cross pattern, with the 50-day and 200-day Exponential Moving Averages (EMA) crossing each other.
However, the stock has jumped above the extreme overshoot level of the Murrey Math Lines, while the Relative Strength Index (RSI) and the Stochastic Oscillator have become highly overbought.
Therefore, there is a likelihood that the stock will pullback a bit, and possibly retest the important support level at $1.95, which is the strong pivot reverse point of the Murrey Math Lines.
The alternative scenario is where the Bitfarms stock price continues rising and reaches the key point at $3.30, the highest swing on June 18, which is about 13% above the current level.
BITF stock has jumped as the turnaround continues
The Bitfarms stock price has soared after the management announced a strategic shift recently. One of the main approaches is refocusing on the United States, and Canada to a small extent. It did that by exiting the Argentinian market.
Bitfarms has also expanded its business from a purely Bitcoin mining company into a provider of data center solutions for the artificial intelligence industry.
This approach mirrors that of CoreWeave, which has become a major powerhouse in the AI industry. Other Bitcoin mining companies like IREN and Core Scientific have expanded to this industry.
Its AI buildup is happening in Pennsylvania on a 296-acre property. Also, it plans to double its acreage of data center space in Washington.
Bitfarms stock price has also done well after publishing strong financial results in August. Its revenue rose by 87% to $78 million, helped by higher Bitcoin prices and higher mining production.
Still, the results had some blemishes as the gross mining margin dropped to 45% from 87% in the same period last year. Also, the company reported a big loss, most of which was attributed to its winding up of its Argentina operations.
The main risk that the company faces is that expanding to the data center business is a highly capital-intensive investment, meaning that the company may be at risk of dilution over time. This is the main reason why a fast-growing data center business like CoreWeave stock has pulled back from the year-to-date high.
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