Tom Lee's BitMine Stock Faces Cost Price Risk — Price Drops Significantly by 10%

BitMine Immersion Technologies is entering a high-risk phase as paper losses from its Ethereum holdings continue to grow. The stock has failed to maintain its recent recovery momentum, while both technical signals and cryptocurrency-related indicators suggest waning confidence.
As of February 10, BitMine’s total investment reached nearly $15 billion. The company’s current portfolio value has decreased to approximately $7.7 billion.
This means that, in theory, nearly 49% of the invested value has been wiped out. Meanwhile, Ethereum is trading around $1,950, while BitMine’s actual cost basis is approximately $3,850. With ETH prices nearly 50% below the average purchase price, most investments are heavily in the red.
Cost Basis Losses and Hidden Divergence Signal Increasing Selling Pressure
BitMine’s biggest weakness is its shrinking safety margin. The actual price indicates where the company has accumulated most of its Ethereum. When the market price remains significantly below this level, companies will face pressure to reduce their Ethereum holdings.

Current data shows:
Average ETH cost basis: $3,850
Current ETH price: $1,950
Unrealized loss: 49%

This puts BitMine in a vulnerable position. Technical signals further reinforce this risk.
From November 18 to February 9, the BMNR index formed lower highs on the daily chart, while the RSI indicator formed higher highs. RSI tracks momentum by measuring buying and selling strength.
When prices form lower highs and RSI forms higher highs, this creates a hidden bearish divergence. It indicates that momentum is weakening beneath the surface.

Immediately after this divergence appeared, selling activity resumed. The BMNR index recovered nearly 26% from its January lows. However, the rally was not sustained and is now at risk of a correction, due to divergence and increasing cost basis disparity pressure.
Weak Capital Flows and Overlapping Risks Indicate Waning Confidence
Large capital flows are beginning to show signs of hesitation. The Chaikin Money Flow (CMF) index tracks whether large investors are accumulating or distributing. Values above 0 typically signal buying, while values below 0 indicate selling pressure.
From late November to early February, CMF has been trending upward despite falling prices. This suggests some long-term support remains. However, even during the recent 26% rebound, CMF failed to break above the downward trendline.
It also couldn’t create new highs or even surpass the zero line. This means the rally lacks strong backing from large investors, and the current trend favors withdrawal by major holders.

The moving averages provide another warning. The 100-day exponential moving average (EMA) is approaching the 200-day EMA. EMAs give more weight to recent prices, making them useful for early trend change detection.
When short-term averages fall below long-term averages, it often signals deeper weakness. On January 27, a death cross occurred when the 50-day EMA crossed below the 200-day EMA. Following this, BMNR declined over 44%.

If another death cross occurs, downward pressure could intensify, even if not as severe as the previous one. The risk increases if Ethereum continues to weaken. The BMNR indicator still shows a moderate correlation with ETH at around 0.5.

Continued ETH weakness could directly impact stock prices.
Key Stock Price Levels Indicate the Start of the Next Downtrend
With increasing losses based on cost basis, the stock price structure of BitMine is becoming critically important. The most important short-term support level is around $17, just over 10% below current levels. This level has served as support during recent corrections.
If BMNR drops below $17, the downward momentum could accelerate significantly.
Below this level, the next support zone is near $15. If this fails, Fibonacci analysis suggests a target of $11, marking the 0.618 retracement level, historically a strong support. A move toward $11 would represent a further decline of over 40% from current levels.
Overall, the recovery process remains challenging. BitMine’s stock price needs to break above $21 to ease immediate pressure. This level coincides with previous resistance.

Only when the price surpasses $21 will the short-term structure begin to improve. To continue rising toward $26, Ethereum must strengthen, and capital demand must increase. Currently, both factors are uncertain. As long as ETH remains well below BitMine’s cost basis and capital flows weaken, rallies are likely to face strong selling pressure.