CleanSpark stock: Elliot Wave analysis points to more CLSK upside

CleanSpark (NASDAQ: CLSK) stock price surged hard on Wednesday as Bitcoin bounced back as investors focused on the upcoming Bitcoin halving. The CLSK shares surged by more than 20% to $20.25 and is nearing the year-to-date high of $23.80. It has jumped by 1,100% from the lowest level in 2023.

CleanSpark and halving

CleanSpark is one of the biggest Bitcoin miningin the world. It is a leading company that produces thousands of coins every quarter thanks to its thousands of mining machines.

The most recent results showed that CleanSpark’s revenue came in at $73.8 million in the fourth quarter, a 1655 increase from the same period in 2022. This performance happened as the average Bitcoin price rose from $18,000 to $36,000 in the two quarters.

CleanSpark benefits when the price of Bitcoin is in a strong uptrend. It can sell its mined coins at a profit while the value of coins in its balance sheet rises. The company is also benefiting from low energy prices as the average cost of power fell to $4.04.

The biggest concern among investors is how CleanSpark will perform after the halving event, which is scheduled for April.

Halving is a crucial event that reduces the number of blocks mined per day by half. In this case, all factors held constant, CleanSpark will produce half the number of coins that it is producing now.

In this case, the company will only benefit if it reduces its cost of mining coins sharply and if it ramps up its production. Externally, the price of Bitcoin needs to do well. Analysts believe that the coin will continue rising in the long term, with those at Standard Chartered expecting it to rise to $150,000 this year.

CleanSpark and other Bitcoin mining companies have been preparing for halving for a while. For example, the company is ramping up operations in Dalton, Georgia, Mississippi, and Sandersville.

Further, the company could benefit from the halving event, which is expected to phase out inefficient miners. This is notable since CleanSpark has some of the lowest costs to mine Bitcoins, which is a positive thing. The CEO recently said:

“This organic growth in market share means we can capture a larger portion of bitcoin rewards without additional infrastructure investments, leading to enhanced returns for our shareholders.”

CleanSpark also has a strong balance sheet to help it in the current halving period. It had over $229 million in liquidity, which is made up of $62.5 million in cash and 3,700 coins. These coins are now valued at $247 million.

CleanSpark stock price forecast

Turning to the daily chart, we see that the CLSK share price has been in a strong bullish trend since January 2023. It jumped to a high of $23.50 this year, a notable level since it was its highest point in November 2021.

CleanSpark has remained above all moving averages and the Ichimoku cloud. Most importantly, it has moved to the fifth phase of the Elliot Wave. Therefore, the stock will likely continue rising as buyers target the YTD high of $23.50. A move above that level will see it jump to over $25 before halving.

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