May 11, 2022 (Penny Stocks via COMTEX) -- CPI data and the inflation report isn't the only thing driving directional momentum in the stock market today. Cryptocurrency prices have sent a shockwave across crypto stocks today. In particular, some of the already beaten-down crypto penny stocks have taken it on the chin. This was thanks to a continued slide in the price of Bitcoin, Ethereum, and other cornerstone cryptocurrencies this week.
Bitcoin broke below a long-standing support over the weekend. For months, the $30,000-$35,000 range had been a static area of support for the leading cryptocurrency. However, a shake-up in the digital asset world triggered a heavy sell-off heading into the week.
Why Is Bitcoin Down?
Since the beginning of April, crypto markets have experienced much weaker conditions. While some argue BTC is a hedge for inflation, the performance suggests otherwise. Over the weekend, traders weighed the latest rate hike decision from the Federal Reserve, which triggered a sell-off in Bitcoin and Ethereum to some of their lowest levels in months.
But it hasn't been currencies like Bitcoin alone that have shaken up crypto markets. Stablecoins have also pushed the envelope on the future of digital assets. This week, U.S. Treasury Secretary Janet Yellen discussed TerraUSD (UST), "There was a report this morning in the Wall Street Journal that a stablecoin known as terrausd [UST] experienced a run and had declined in value."
In a wild twist, the stablecoin unpaired itself with the US dollar and dipped to all-time lows of 66 cents this week. According to the Bank of International Settlements, nine out of ten central banks worldwide are already exploring their own central bank digital currencies. Stablecoins have helped speed up the initiative.
Crypto Stocks Today: Time To Buy Or More Pain Ahead?
While the price of Bitcoin has made a rebound during Wednesday's early morning session, it hasn't yet made a bull case for certain crypto penny stocks . A lot will depend on how much follow-through (if any) is seen in the days to come. In the meantime, we take a closer look at a handful of cryptocurrency penny stocks to watch as the digital asset market experienced significant volatility.
Bitfarms Ltd. /zigman2/quotes/213738555/composite BITF -11.05%
Bitcoin miner Bitfarms Ltd. ( NASDAQ: BITF ) is another example of the lackluster performance in crypto stocks today. Shares of the penny stock printed fresh 52-week lows this week at $1.87 as Bitcoin prices stumbled. Even with this as the case, it hasn't put the brakes on the company's expansionary focus.
In its latest production update, Bitfarms reported mining over 400 bitcoins at an average of 13.5 BTC per day. "In early April, we surpassed our 3 exahash per second goal (EH/s) with the start of production at our Leger farm, our ninth operating facility. This momentum continued throughout the month, with new miner installations driving our hashrate to over 3.3 EH/s at month-end, up 22% from 2.7 EH/s at the end of March," said Emiliano Grodzki, CEO of Bitfarms.
BITF stock traders are now looking ahead to next week. On May 16th, the company reports its first-quarter 2022 earnings results. For those who like to look at options data ahead of earnings, the BITF Call options hold much more significant open interest than the Puts. The highest level of OI sits at the $5 strike. In light of the recent trend in crypto stocks today, however, will any bullishness become muted by broader bearish catalysts?
Canaan Inc. /zigman2/quotes/215105791/composite CAN -6.22%
Bitcoin mining stocks and data companies are going to be in focus. As the digital currency ecosystem evolves and blockchain technology advancements are made, related companies will continue gaining attention. Canaan Inc. ( NASDAQ: CAN ) offers computing solutions and software services specifically for Bitcoin mining.
Share prices of CAN stock have moved in lockstep with the price of Bitcoin this year. The penny stock hit new lows on Wednesday of $2.87. The last time shares traded this low was in late-2020. That was just a few months before it made its historic move to record highs of $39.10 the next quarter.
If CAN stock is on your list of crypto stocks today, keep next week in mind. On May 19th, Canaan will report its first-quarter earnings results before the market opens. Last quarter, the company reported strong year-over-year sales growth and guided that Q1 sales would range between RMB1.5 billion and RMB1.6 billion (roughly $223,420,350 to $238,315,040 USD).
Bit Digital /zigman2/quotes/203221927/composite BTBT -9.77%