RIOT getting oversold on bull wedge, but it's still toast!

So RIOT has been a hugely fun stock to trade, and with my 42k/30k BTC projection, it is easy to see why.

Today RIOT reported an underwhelming 1771 BTC has been mined by their operation, with a 'today market value' of about 100m. And they are maybe going to add some capacity if semiconductor shortages and bitmain are able to deliver more. Sporting a market cap of 2.5B today, this is quite a premium for a weak bitcoin generation operation. If you are also thinking bitcoin struggles in the short term, the future value is even lower. Plus, bitcoin adjusts difficulty every ten days, so if others are adding hardware, it is possible the expected gains from additional hardware may be cut somewhat. Of course, the opposite of all these things could also happen - and even if they did, this thing is still way, way too expensive! I would expect a market cap around the 500m range, or about 1/5 of where it trades today if my predictions are true, and if I am exactly wrong and things double instead of halve, perhaps you could get to a 1B value, implying a 60% premium today.

Technically, it looks like we might find support in this ~~30 zone - including from a bull wedge formation. This would imply a bounce toward thick green uptrend line - call it 35-37, but frankly I don't see any catalyst to push through it except a massive BTC rally. My short term (call it June-ish) is 20-25 with a longer term September target range of 10-17.

Very disturbingly, the small mini rally on BTC from under 50k to 58k over the past few weeks saw RIOT's price continue to decline - exactly not what one would expect! There is a clear descending triangle forming (blue lines), weakening RSI, MACD - none of the things you'd want to see (weekly MACD looks atrocious). This wedge might get you a chance to get out and get short, if you're not already. GL!

Trade closed manually:

I have closed my puts and bought calls now - so reversing! I think this selloff is over for now, but this company is still way over-valued.

Comment:

note this reversal trade is meant to be short lived; will probabaly close sometime tomorrow. primary reason is the bounce/tapo of the 200 day moving average and extreme movement outside of the lower bollinger bands (which were around 25 or so). should be good to 24 or so. then it can keep going down towards its FMV of like 5 or something.

Trade closed manually:

Closing those calls, mmmmmm tasty.