Riot Blockchain Inc (NASDAQ: RIOT) bounce back, after a harrowing crash in 2018, is gaining momentum. A 100% plus rally from all-time lows have come on the heels of a mammoth rally in Bitcoin (BTC) price. Cryptocurrency focused investments are on a roll in the wake of sentiments in the volatile sector improving.
RIOT Share Price Analysis
The company has also continued to register tremendous gains in the market on generating revenues of $7.7 million at a time when the cryptocurrency sector was on a downtrend. Renewed investor interest also comes on the company announcing it has reduced its state costs by 24%, setting the stage for it to enjoy profitability on enhanced mining operations.
Leadership changes have also come into play in recent months as the company looks to tap top talent as it seeks to enhance its prospects in the cryptocurrency sector. With the stock resorting to trading in an uptrend, a rally from all-time lows is likely to continue gaining momentum.
A spike to the $4.86 mark has opened the door for the stock to make a run for the $8 a share level, which is a critical resistance level. Conversely, pullbacks face strong support at the $4 a share level, above which the stock remains well positioned to continue edging higher.
A violation of $4 a share support level could open the door for short sellers to come back and push the stock lower in continuation of the underlying bear trend. A violation of the $3 support level could result in the acceleration of the sell-off wave.
What Does Riot Blockchain Do?
Riot Blockchain is engaged in the development of blockchain technology. The company operates one of the largest cryptocurrency mining operations from which it generates most of its revenues. Its primary focus as part of the mining operations is Bitcoin, the flagship cryptocurrency.
Riot Blockchain upside action could receive a boost on the company reiterating a number of milestones achieved over the past year. Top on the list is the confirmation that the company generated revenues of $7.7 million on the production of 1,081 Bitcoin’s and 3,023 Litecoin.
In addition, the company saw its gross margin improve to 33% as cash and digital currencies totaled $1.6 million. However, the company plunged to a net loss of -$58 million. In defense of the wider than expected net loss, the company attributes the same to non-cash aggregate impairments, depreciation as well as amortization and stock-based compensation.
The company remains well positioned to perform even better on revenue generation in 2019 as cryptocurrencies prices continue to edge higher if a recent bounce back is anything to go by. A 20% gain in cryptocurrencies prices is a welcome considering they trended lower for the better part of last year.
Riot Blockchain has established a robust cryptocurrency mining operation made up of approximately 8,000-miner facility in Oklahoma. In addition to enhancing mining operation, the company is planning to diversify its operation in pursuit of new revenue streams.
Cryptocurrency Exchange Ambitions
In 2019, the company intends to launch RiotX, a planned cryptocurrency exchange. The Company has already inked a strategic partnership with Shift Markets for the establishment and launch of the exchange. The company has also secured licenses that will enable the operation of the exchange in key states across the United States.
“RiotX is licensed and/or approved in five states and has pending licenses in another 17 states with review in another two states. The Company plans to be operational in 24 states in the short term as management continues to work towards the goal of having RiotX serving all 50 U.S. state,” Riot Blockchain in a statement.
In February, the company announced a string of management changes as part of an ongoing restructuring drive. In view of the changes, former CFO Jeff McGonegal took over as the Chief Executive Officer. The company also carried out changes to its board committee structure resulting in the combination of the nominating committee and strategy committee.
“Riot Blockchains Board of Directors is very focused on delivering value for the Company’s shareholders and believes that a new streamlined leadership structure is critical to achieving success, while also achieving cost reductions.,” Riot Blockchain in a statement
What Next For Riot Blockchain
Riot Blockchain is likely to continue edging higher as the price of Bitcoin continues to edge higher. A price spike in the flagship cryptocurrency is what is needed to turn the company’s mining operations profitable.
Above the $4 a share mark, the stock remains bullish. However, a breach of the $3 support level could result in the acceleration of the sell-off wave.
We will be updating our subscribers as soon as we know more. For the latest updates on RIOT, sign up below!
Disclosure: We have no position in RIOT and have not been compensated for this article.