Riot Blockchain Stock Forms Pennant Pattern: A Technical Analysis

Riot Blockchain Inc. (NASDAQ:RIOT) shares and other cryptocurrency-related stocks moved higher Monday after the price in Bitcoin (CRYPTO: BTC) rose following statements from Elon Musk.

Musk said he would resume allowing Bitcoin transactions at Tesla Inc. (NASDAQ:TSLA) when there is reasonable clean energy usage by miners. 

Riot Blockchain was up 14.18% at $35.43 at last check.

Riot Blockchain Daily Chart Analysis

• Shares are trading in what technical traders call a pennant pattern. The stock is nearing the end of the pennant pattern and soon could see a large move.
• The stock crossed above the 50-day moving average (green) Monday, and trades above the 200-day moving average (blue), indicating sentiment in the stock is likely bullish.
• Each of these moving averages may hold as an area of support in the future.

Key Riot Blockchain Levels To Watch

• Shares are nearing the end of the pennant pattern, and a breakout could move the stock strongly in the same direction as the breakout.
• The pennant pattern occurs after the stock makes a run up and the price is later condensed between the highs and lows until the price is able to break out of either support or resistance.
• The Relative Strength Index (RSI) shows that the stock has started to enter the area above 50. This signals that there are more buyers in the stock than sellers. A breakout of the pennant pattern while the stock is well in the overbought range could bring about a large move.

What’s Next For Riot Blockchain?

Bullish technical traders would like to see the stock trade in the pennant pattern for a bit longer before breaking out of the pattern resistance. Bulls would like to see a breakout of the stock while the RSI trades well into the overbought range.

Bearish technical traders would like to see the stock fall below the pattern support. If the stock can break below the pattern support and then go on to hold it as resistance, the stock may see a strong downward move.