Summary Bitcoin remains near all-time highs, post-halving with minimal impact on price. Marathon Digital's technical outlook is murky with deteriorating conditions, but long-term bullishness remains. MARA stock's growth in hash rate and reward share post-halving shows potential for future success, making the current stock price a potential bargain. The Bitcoin ( BTC-USD ) saga for 2024 continues, as the OG alt-coin remains very near its all-time highs. We know the halving took place a couple of months ago, to much fanfare, but not a huge amount of actual impact on the price of the coin. For miners, it's been a wild ride, but with the halving obviously very well telegraphed in terms of both timing and impact, it was priced in. I've covered miner Marathon Digital ( MARA ) a few times, and I've generally been bullish on the stock. Most recently, I covered Marathon after its earnings report in late February, noting the potential for a bullish technical pattern. That potential didn't materialize, and instead, we got a big selloff into long-term support at ~$14. Three-plus months on - and with the halving behind us - what is the outlook for Marathon now? I still like Marathon long-term as a miner that's taking share, mining efficiently, and holding a ton of Bitcoin in treasury, but for the short term, the outlook is a bit murky. Watch long-term support With the failure of the potential breakout earlier this year, Marathon has continued its consolidation. There's been an uptrend channel forming since April, but pre-market action this morning threatens to break that channel, as well as sending the stock below both of the major moving averages. StockCharts With this deteriorating technical condition in mind, I cannot objectively look at this chart and be bullish short-term. For now, the PPO is above the centerline, which is bullish, but the price action simply doesn't look very good. On the daily chart, then, I'm seeing cause for caution and waiting to take a position. The closer it gets to the support level at $14/$15, the better the buy it is. Of course, if that support level is broken, all bets are off from a long perspective, but for now, I'm neutral on the daily chart. Obviously, the price of Bitcoin is important for any miner, so let's check in on Marathon's action relative to the coin itself. We'll start with the 20-day correlation of Marathon to Bitcoin to ensure that they do indeed trade with each other. StockCharts We can see the correlation today is 0.80, but it actually went negative ahead of the halving. I wouldn't expect that condition to happen a lot, or persist for long when it does, but it's always a good idea to validate any assumptions of correlation. For now, they are pretty highly correlated. Next, let's take a look at the price of Marathon relative to Bitcoin, which is a measure I like to use for Bitcoin miners. StockCharts Marathon's valuation has plummeted relative to Bitcoin by 61% since the start of the year, which doesn't guarantee us anything, but we can see these periods of low relative valuation have generally resolved higher. These moves have been temporary in some cases, but from a fundamental perspective, this looks much better than it did in December or January. Finally, I'm not particularly enthusiastic about the look of Bitcoin itself right now, which, as we've seen, should have a large impact on the price of Marathon. StockCharts We have several attempts to break the ~$72k level that have all failed, as well as an ascending triangle that has now failed. The PPO is in positive territory but declining, so the price of Bitcoin itself is not something I see a lot of reason to be super bullish on at the moment. Let me be clear in stating that I remain a Bitcoin bull for 2024. I think we're going to see big new highs well clear of $72k, but given the look right now on the chart, I don't think that's going to be particularly soon. Like the chart of Marathon, I'm neutral on Bitcoin until we get some clarity on the next big move. Marathon's place in a competitive environment I've covered Marathon's growth story before, but it's a nice point in the year after the halving to check in on progress. Investor presentation The company is on track to boost its hash rate to ~50 EH/s by the end of next year, which would be about double what it started 2024 with. That's a lot of capacity growth, but what matters is the company's ability to maintain or take share from others on the network that are trying to do the same thing. Investor presentation Marathon has rapidly gained share over the past several quarters, ending 2023 at 4.4%. In May , the first full month after the halving, the company produced 616 Bitcoin for a share of 4.2%. While that's lower than the Q4 2023 tally, it's still in the ballpark, and keep in mind that Marathon has huge capacity upgrades coming. I suspect we'll see reward share creep towards 5% in the coming quarters, but we'll have to see. If I'm right about that, the current share price of ~$19 will likely prove to be a bargain, but that's dependent upon Bitcoin pricing improving and the company continuing to take share. If you end up taking a position in Marathon, this is a critical measure you want to keep an eye on. Wrapping up My long-term bullishness on Bitcoin and Marathon has not changed. However, we have to take the market we have, not the market we want, and I see short-term weakness on both charts. On a technical analysis basis, I'm neutral on both securities. From a fundamental perspective, I still like Marathon, and I think the stock is much more attractive than it was in February. The valuation is much cheaper relative to Bitcoin, it continues to take share in rewards, and it owns almost 18k Bitcoin as it has rapidly ramped up its holdings of coins, rather than selling them. That hoard is worth about $1.2 billion today, and long-term debt has declined from almost $800 million to just over $300 million. I'm going to maintain a buy rating on Marathon because I think the issues the stock has are likely temporary, and longer-term, I still believe $19 will prove to be a good entry price. The caveat is that for the short-term, we may see a trip close to that critical $14/$15 support level.
