Riot Blockchain stock drops after reclaiming multi-month resistance — what’s next?

riot blockchain stock price drops
“Riot Blockchain stock drops after reclaiming multi-month resistance; what’s next?” Image by Marco Verch Professional Photographer via Flickr

Key Riot Blockchain Takeaways

  • Riot Blockchain (NASDAQ: RIOT) dropped 24% after Q3 2021 revenue, and earnings fell short of analyst estimates.
  • Despite positive revenue and Bitcoin production numbers, the company incurred $15.3 million in losses in Q3 2021.
  • Multiple financial liabilities triggered the said losses for the Bitcoin-only mining company.

JAIPUR (CoinChapter.com) – Riot Blockchain share prices (NASDAQ: RIOT) reflected the firm’s loss-laced Q3 2021 financial report. Selloffs caused the Bitcoin mining company’s shares to drop by 24% after revenue and earnings fell short of analyst estimates.

The company quoted a non-cash stock-based compensation expense of $36.0 million and a non-cash, unrealized loss of $11.2 million on marketable equity securities as reasons behind last quarter’s $15.3 million net loss. For the same period in 2020, losses amounted to $1.7 million.

Related: Northern Data Bitcoin Mining Operator Considering $500 Million IPO

Riot Blockchain Still Has Positive Numbers To Show

Despite the dismal show of financials, not all is dry in the Riot Blockchain land. As per an official press release, total revenue ballooned by 2,532% to $64.8 million in Q3 2021. That’s a 26X growth from the $2.5 million figure in Q3 2020.

Also, mining revenue appreciated by nearly 2099% to $53.6 million. That’s again a substantial upside compared to last year’s Q3 number of $2.4 million. The mining revenue margin increased 6% from 70% in Q2 2021 to 76% in the last quarter.

Compared to Q3 2020, Bitcoin production peaked by 482% to 1,292 BTC in the three-month phase ending September 30, 2021. And compared to Q2 2021’s numbers of 675 BTC, that’s a 91% bump in Bitcoin production.

“We are extremely pleased to report another quarter of record financial results. These results demonstrate the continuous financial and operational improvements that management is focused on delivering for shareholders. Riot’s technology-focused, vertically integrated strategy significantly de-risks the Company’s future growth plans.

Additionally, it enhances future capital efficiencies as technological improvements, such as industrial-scale immersion technologies, are systematically incorporated into future hash rate deployments. With these strengths of Riot at play, the future financial opportunities for the Company are exciting.”

said Riot Blockchain CEO, Jason Les

The Bitcoin miner upgraded its deployed hash rate capacity by 63%, from 1.6 EH/s to 2.6 EH/s (read exahashes per second) in Q3 2021. After September 30, 2021, Riot increased its hash rate capacity further to 2.8 EH/s after deploying 1600 S19J Pro Antminers at the Whinstone unit.

Just A Correction After A Rally

RIOT stock prices reclaimed the multi-month resistance of $48.55 during the morning session on Monday. The latest slide in equity prices happened in tandem with the recent decline in crypto-asset spot rates. The correction happened after RIOT shares sauntered into the overbought region during the rally that began on November 1.

Buyers trying to push up RIOT stock prices
Buyers are trying to push up RIOT stock prices. Source: TrdingView.com

However, buying activity increased again after traders spotted a local bottom based on relative strength index (RSI) dropping below 50 on the 4-hour chart. The 50-day moving average (MA) wave continued to support prices strongly. Bulls will try and push RIOT up as the cryptocurrency market picks up again.

The next upward target is $53.5 post which another dip may follow, leading to an Ascending Channel formation with higher lows.

Can traders push past $84.36 and register a new all-time for Riot shares this cycle? Let’s see.

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