Here’s the Best Crypto Penny Stock to Buy This Week

Bitcoin is down more than 25% since its all-time high above $68,000 just a month ago, as (insanely) over-leveraged traders threw in the towel and stepped out the door.

The headlines were terrifying, but real crypto investors and market-watchers know the real score: The plunge swept away the "weak" money.

And now that the "dead wood" has been swept away, Bitcoin has found solid support at around $46,000 (like we knew it would, right?) and now has the space to take a breather for the next leg higher.

That's great news for Bitcoin and crypto investors in general...

... but it's also bullish for a lot of the crypto stocks out there.

I'm charting a crypto stock right now - a crypto penny stock, of course - that's perfectly primed for the same kind of recovery and move higher as the major cryptos.

In that sense, this stock is kind of like owning Bitcoin at $4. Here's the chart and ticker...

Like Bitcoin, This $5 Stock Is Ready for a Move Up

It wasn't all that long ago that a determined individual with a set of powerful microprocessors could mine Bitcoin for themselves. My buddy Tom Gentile, an early crypto millionaire, mined a few himself that way. It was hot, it was expensive, but it was possible.

Nowadays, though, if you want to mine Bitcoin or any of a number of "proof of work" cryptos, you need enough juice to light up the Vegas Strip and the kind of computing power people try to get into MIT for.

In other words, you need the kind of "firepower" - resources and capital - a private company can provide.

Enter the crypto miners...

The one I like best right now is Digihost Technology Inc. (NASDAQ: DGHI). These folks are based out of Toronto, Canada, and have bagged increasingly larger hauls of Bitcoin over the past few months. Just last month, for instance, the company reported mining more than 69 bitcoins, 161% more than it did in November 2020. That brings its total holdings to just under 571 BTC as of the end of November.

And if things keep going the way they're going, Digihost is only going to increase its haul from here. Its current hashrate - the total computational power it's using to process transactions and mine new fractions of coins - is going to increase from around 415 PH to 1.2 EH by the end of the first quarter of 2022. For those keeping score, that means it's going to ramp up from 415 quadrillion hashes per second to 1.2 quintillion hashes per second.

But, as ever, it's the technical picture that's compelling to me, and it's doubly interesting because it so closely mirrors Bitcoin's own technicals.

What really jumps out at you is the relative strength index (RSI) reading of just below 39. That means this stock is coming very close to textbook "oversold" territory - a bullish signal. The fact that this is happening while the stock is below its major averages is encouraging, too; this is a picture of a stock gathering strength for a move higher. I think it's gone as low as it's likely to go in the near term.

Volume dipped to relative lows as the stock is clearing a technical hurdle. Now, this is not the normal "calling all cars" type of signal that I look for, but that's also to be expected given the recent volatility that we've seen in the crypto markets.

What we're looking at today is a "testing pattern."

That point where the market pauses as they wait to see if the stock passes a short-term technical test.

Think of it like you would the long pause and holding of the breath that you might see as the quarterback fires the ball into the endzone on a strong offensive drive.

The last time I saw this volume pattern was in October, ahead of a strong run in the stock that was supported by... you guessed it, a bullish move in cryptocurrencies.

I'm looking for the same here.

So, I want you to do two things - three, actually:

1: Buy Digihost up to $5.60.

2: Add a 7% trailing stop when the stock hits $6.50 to protect your principal and your profits.

3: Dig this...

Remember Tom Gentile from a second ago? The early Bitcoin miner? His crypto moves are the stuff of L-E-G-E-N-D; he's personally turned $260,000 into $1.6 million - on crypto alone ­­- over the last three years.

And right now, Tom's got two small coins "locked and loaded." He's researched them exhaustively, and he thinks they could have what it takes to 10X Bitcoin's performance in the coming year. Part of that is because they're based on a technology that makes Bitcoin seem, well, kinda like the horse and buggy. As for the rest, you can get the details right here - don't miss out.

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About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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