The Argo Blockchain share price is trading slightly higher this Thursday, up by 1.39%, as the stock looks to continue the recovery from its recent lows. However, the trading volumes remain light, and after two straight days of gains, the stock appears to be running out of bullish momentum.
The recent gains made by Bitcoin above the 20k mark, and further gains by various altcoins, including Ethereum, have had a synergistic effect on pushing up stocks of blockchain companies.
The crypto mining company was hit hard by the downtrend that beset the crypto market. The Argo Blockchain share price had fallen for three consecutive months, losing 20.59% in April, 17.5% in May and 41.80% in June 2022. However, it recovered slightly in July by gaining 29.52% after being forced to sell 637 BTC to clear its outstanding BTC-collateralized debts, including two separate credit facilities obtained from Galaxy Digital.
The company still owes $22m to Galaxy Digital and says it has sufficient liquidity to avoid any potential liquidation risks posed by a further decline in Bitcoin prices. A 30 June report by the company indicates that it still holds 1,963 BTC and other crypto assets, representing an 18% drop from its holdings as of May 2022. The Argo Blockchain share price would still need a significant push in Bitcoin prices above the 24,000 resistance before appreciable demand returns to the stock.
Argo Blockchain Share Price Forecast
The stock remains in a downtrend, but the recovery move is a retracement from the 17 June/30 June lows. The break of the 4.88 resistance (21/28 June highs) has cleared the path for the bulls to aim for the resistance target at 5.53, where the 50% Fibonacci retracement from the 10 May swing high to the 30 June swing low is found.
A break of this area allows the recovery to continue, targeting the 6.00 psychological price point. This price mark lies just above the 61.8% Fibonacci retracement at 5.97. A further advance will aim for the 16 March/26 April lows at 7.36 before the 9 March and 19 April highs at 9.07 become additional upside targets.
The continuation of the downtrend only resumes on a breakdown of the 17 June/30 June lows at 3.77. This move would have to be preceded by a breakdown of the 4.88 support level. A closing penetration below 3.77 allows the stock to test new lows, with the 27% Fibonacci extension at 2.83 being the potential immediate target. 1.60 is the additional price point formed by the 61.8% Fibonacci extension level. This price mark becomes viable if there is further price deterioration below 2.83.