The Rebound Nobody Expected (Yet)
Bitcoin dropped below $62,000 in late April, marking its weakest level in a month. That kind of price action typically sends mining stocks into free fall. Instead, something different happened. TeraWulf and HUT 8 — two of the largest publicly traded Bitcoin miners — refused to follow the broader selloff downward. They started building bases. That distinction matters.
Most traders watch Bitcoin price and assume the miners will follow in lockstep. They do eventually, but not always immediately. When a stock forms a base while its fundamental driver is under pressure, it tells you something: someone with capital is buying.
Where the Numbers Stand Right Now
Bitcoin recovered to approximately $64,500 by mid-May, reclaiming roughly $2,500 from its monthly low. That is not a screaming rally, but it is meaningful enough to trigger relief buying in leveraged mining plays. TeraWulf (TRAW) traded near $6.80 during the weakness and has since stabilized above $7.20. HUT 8 (HUT), listed on NASDAQ, moved from lows near $10.30 to mid-$11 range.
These are not dramatic percentage gains — roughly 5-7% in three weeks. What matters is the pattern. Both miners held support levels that would have been destroyed in a genuine panic. That is a tell.
Cathie Wood is Watching (And Buying)
ARK Invest, the Cathie Wood-managed firm focused on disruptive innovation, has been a consistent buyer of Bitcoin mining equities during weakness. ARK’s Bitcoin mini trust (ARKB) holds exposure to MARA (Marathon Digital) and other mining-adjacent positions. When macro Bitcoin weakness hits, ARK historically adds to positions rather than trimming them. The firm’s buying patterns are public through SEC filings, and they move slower than retail traders — which is why their accumulation phases often precede rallies by 6-8 weeks.
The Margin Story That Nobody Wants to Discuss
Here is the uncomfortable truth: Bitcoin mining stocks are levered plays on Bitcoin, not direct Bitcoin ownership. When Bitcoin pulled back from $71,000 in March to $62,000 in April, mining stocks declined 18-24% while Bitcoin itself fell only 12%. That leverage works both ways. On the way back up, TRAW and HUT will outperform Bitcoin percentage-wise. That is baked into the math.
My algo signals flagged this reversal pattern three weeks ago when TeraWulf closed above its 20-day moving average on elevated volume without breaking below the prior week’s low. That is a classic basing setup. It does not guarantee a breakout — bases fail — but it shifts the risk-reward toward long positions once confirmation hits.
What Happens If Bitcoin Breaks $65,500
The technical level to watch is $65,500. That is where Bitcoin met resistance in March before rolling over. If Bitcoin holds above that level for a weekly close, mining stocks get confirmation to re-test their March highs. TRAW could target $8.50-$9.00. HUT could push toward $12.50-$13.00. Again, percentage terms these are not catastrophic moves — 15-18% upside — but in a choppy market, that is a real position-sizing opportunity.
The base is not yet broken. Bases often hold for weeks. But the setup is in place, and the smart capital appears to already be positioned.
The Actionable Setup
If you own Bitcoin, you own the volatility. If you want leveraged exposure to that volatility, mining stocks offer that, but they require patience. TeraWulf and HUT 8 are building bases. Bases mean accumulation zones. Do not chase the breakout — wait for a weekly close above $8.50 and $12.50 respectively before adding size. The risk is a retest of the lows if Bitcoin rolls over again. The reward is a 15-20% gain if Bitcoin stabilizes above $65,500 and holds there through June.
That is the trade. Base, confirmation, execution. Not sexy, but it works.
The information provided on SmartCapitalLog is for educational and informational purposes only and does not constitute financial, investment, or trading advice. Past performance is not indicative of future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. SmartCapitalLog and its authors are not liable for any financial losses resulting from decisions made based on the content published on this site.
