HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) is finally making a comeback after a long and steady downtrend. Price gains in recent weeks have also coincided with an uptick in market sentiment, following the approval of a 50% increase in the company’s ASIC Capacity.
Catalyst & Stock Action
An increase in ASIC capacity is a significant milestone as it comes at a time when cryptocurrencies are showing signs of bottoming out after a rollercoaster 2018. The increase should go a long way in strengthening the company’s cryptocurrency mining capacity.
Investors reactions to recent developments have been positively depicted by an uptick in trading volume that has helped trigger a bounce back in share price, from one-year lows. While the stock is still languishing near all-time lows, it has started showing signs of breaking out, as sentiments in the broader cryptocurrency sector continue to turn positive.
A 90% rally since the start of the year all but affirms the emerging uptrend, as the stock continues to recoup losses accrued over the past year. Considering the long-term downtrend, Hive Blockchain will have to rise and stabilize above the $0.80 mark for the bulls to be in firm control.
Above the $0.80 mark, the stock should make a run for the $1.20 mark, the next substantial resistance level. In the short term, the stock faces immediate support at the $0.27 mark on sell-offs. A breach of the critical support level would leave the stock vulnerable to further drops, in continuation of the long-term downtrend.
Hive Blockchain casts itself as a growth-oriented company focused on bridging the gap between the blockchain sector and the traditional capital markets. The company is currently exploring blockchain innovations. In addition, it owns a state-of-the-art GPU based cryptocurrency mining facility.
Hive Blockchain Technologies Breaking Out
Hive Blockchain has started breaking out after a rollercoaster 2018, in response to improving market sentiments. Bitcoin (BTC) the flagship cryptocurrency breaking out from all-time lows continues to fuel a bounce back of crypto-related stocks.
In addition, Hive Blockchain stock sentiments have inched higher in recent weeks on the company upgrading into the OTCQX market. Listing in the popular listing index is a major achievement, as it paves the way for the company to gain exposure in the broader U.S stock market.
“The OTCQX equips HIVE with better liquidity and exposure for existing and future U.S. investors as we continue our long-term strategy to enhance shareholder value. […] trading on OTCQX in the U.S. provides investors with an opportunity to participate in the long-term potential of blockchain,” said Frank Holmes, Interim Executive Chairman.
Mining Capacity Boost
Listing on U.S market comes a month barely after the company’s cryptocurrency mining capacity received a significant boost. Early in the year, the TSX Venture Exchange approved the deployment of the company’s 100 Petahashes of cloud-based ASIC mining capacity. With the approval, the company’s mining capacity is poised to increase by 50% to 300PH.
The approval could not have come at a better time given that it paves the way for Hive Blockchain to benefit from a rally in cryptocurrency prices. Bitcoin and Ethereum (ETH) are already up by more than 20% from December lows.
“We continue to participate in the Ethereum ecosystem using our facilities in Iceland and Sweden, and HIVE maintains an inventory of Ethereum and Bitcoin as we are bullish on the long-term potential of cryptocurrencies broadly,” said Mr. Holmes.
However, the company has suffered a significant blow on the Norwegian government approving a legislative bill that bars cryptocurrency miners from enjoying tax, relief on power consumption. The change is poised to come into effect in March. The change could have a significant impact on Hive Blockchain ability to attract long-term foreign investment, given the expected spike in operating costs in the country.
What Next For Hive Blockchain
After a rollercoaster 2018, Hive Blockchain Technologies is showing signs of breaking out, as sentiments in the broader cryptocurrency sector turn positive. The stock is already up by more than 90%, in response to a spike in Bitcoin and Ethereum prices.
Improvement in cryptocurrency mining capacity is another development that affirms the company’s growth prospects as crypto prices continue to edge higher. For early movers, Hive Blockchain appears to be an attractive risk-reward play, as crypto prices continue to bottom out from one-year lows.
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Disclosure: We have no position in HVBTF and have not been compensated for this article.