Cryptocurrency-related stocks are at significant risk as Bitcoin forms risky patterns pointing to more downside

Coinbase stock price has already crashed by 24% from its highest point this year and is hovering at its lowest point since May 20th.

Bitcoin-related stocks are facing a lot of pressure as the coin forms risky technical patterns that could see it crash to $50,000. Coinbase stock price has already crashed by 24% from the highest point this year and is now trading at the lowest level since May 20th.

Bitcoin mining stocks have also retreated from their record highs. For example, MicroStrategy (NASDAQ:MSTR) stock has dived by more than 31% from the YTD high while Marathon Digital (NASDAQ:MARA) has collapsed by 42%. Other Bitcoin mining companies like CleanSparK, Cipher Mining, Bitfarms, and Core Scientific have also moved into a bear market after falling by more than 20% from their YTD highs.

All these stocks tend to do well when Bitcoin is in a bull market. For example, most of them soared to multi-year highs in March as Bitcoin climbed to a record high of $73,600. This performance happened because BTC is the main driver for the crypto industry and when t soars, other altcoins do well. At the same time, Bitcoin mining companies generate higher profits when Bitcoin is in an uptrend as well while Coinbase and other exchanges see more activity.

Now, the biggest risk for stocks like COIN, MSTR, and MARA is that Bitcoin is in a dangerous path that could see it crash to $50,000 in the near term. As shown above, the coin has formed a quadruple-top chart pattern whose neckline is at $56,400.

This pattern forms when buyers are afraid of buying an asset above a key resistance point, which we saw earlier this month as Bitcoin failed to rise above $72,200. In most cases, this pattern is among the riskiest in the financial market.

At the same time, Bitcoin has crashed below the 50-day and 100-day Exponential Moving Averages (EMA). It is also hovering at the 23.6% Fibonacci Retracement level.

Therefore, we can expect to see more downside for the coin, especially if sellers manage to push it below the neckline at $56,400. If this happens, the next point to watch will be the psychological level at $56,400 followed by the 50% retracement level at $44,000.

Such a performance will lead to more downside for Bitcoin mining stocks like Riot Platforms, Cipher Mining, and Marathon Digital. This performance will likely happen because of a lack of catalyst in the crypto industry.

Bitcoin halving has already happened, the SEC already approved Bitcoin ETFs and the Fed shows no signs of starting to cut interest rates. Bitcoin ETFs are also seeing outflows, pointing to weaker demand.