We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.

Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.

Penny Stock of the Day: Bit Digital Inc. (NASDAQ: BTBT)

Today’s penny stock pick is the bitcoin mining company, Bit Digital Inc. (NASDAQ: BTBT).

Bit Digital Inc., together with its subsidiaries, engages in the bitcoin mining business. It is also involved in the treasury management activities. The company’s mining platform operates with the primary intent of accumulating bitcoin which may sell for fiat currency from time to time depending on market conditions.

Website:  https://bit-digital.com

Latest 10-K report: https://www.sec.gov/ix?doc=/Archives/edgar/data/1710350/000101376225000307/ea0233723-10k_bitdigit.htm

Analyst Consensus: As per TipRanks Analytics, based on 4 Wall Street analysts offering 12-month price targets for BTBT in the last 3 months, the stock has an average price target of $6.17, which is nearly 110% upside from current levels.

Analysts | Source: TipRanks.com

Potential Catalysts / Reasons for the Hype:

  • Bit Digital’s recent pivot is to focus entirely on Ethereum (ETH) for its corporate treasury. A rebound in ETH prices could significantly boost BTBT’s stock, as its treasury strategy is now fully tied to Ethereum.
  • Corporate Insiders placed Informative Buys of Shares Worth $2.5M in the Last 3 Months.

    Insiders | Source: TipRanks.com

  • The broader crypto market’s bullish sentiment, with predictions of Bitcoin reaching $180,000–$250,000 by year-end 2025, may spill over to Ethereum-related stocks like BTBT, creating a positive bias.
  • BTBT is shifting from a cryptocurrency mining-centric model to a leader in High-Performance Computing (HPC) infrastructure. In Q4 2024, HPC services (cloud and colocation) contributed 42% of Bit Digital’s revenue. The company’s rebranding of its HPC division as WhiteFiber, Inc. in February 2025 underscored this strategic shift.
  • C. Wainwright projects WhiteFiber to reach $150 million in quarterly revenue by year-end 2026, with total revenue potentially hitting $80 million in 2026.
  • Rumors of a major partner taking a significant stake in BTBT.

On analyzing the company’s stock charts, there seem to be multiple bullish indications…

Bullish Indications

#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out of the falling wedge pattern. Once the stock breaks out of the falling wedge pattern, it could move higher.

BTBT – Daily Chart

#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.

#3 Price above MAs: The stock is currently above its 50-day as well as 200-day SMA, indicating that the bulls have currently gained control.

#4 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.

#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are in control.

BTBT – Weekly Chart

#6 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30 in the weekly chart. This indicates possible bullishness.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, the ideal buy level for BTBT is above the price of $3.65.

Target Prices: Our first target is $4.90. If it closes above that level, the second target price is $6.00.

Stop Loss: To limit risk, place a stop loss at $2.90. Note that the stop loss is on a closing basis.

Our target potential upside is 34% to 64%.

For a risk of $0.75, our first target reward is $1.25, and the second target reward is $2.35. This is a nearly 1:2 and 1:3 risk-reward trade.

In other words, this trade offers 2x to 3x more potential upside than downside.

Potential Risks / Red Flags:

  1. The company has a history of net losses.

    BTBT – Consolidated Statement sof Operations

  2. The company’s operations require significant capital investment to purchase and maintain the property and equipment required to provide specialized infrastructure to support generative AI work streams. In addition, WhiteFiber’s operations include a significant level of fixed and semi-fixed costs.
  3. Any advancements in artificial intelligence could impact the demand for AI and HPC data centers. Such advancements may reduce the need for high-performance computing (HPC) and AI-specific data center infrastructure, which could have an adverse effect on BTBT’s business, results of operations, and financial condition.
  4. The company has customer concentration risk. During fiscal year 2023, 12 customers accounted for 100% of the revenue of Enovum data center in Montreal. In the HPC data center in Iceland, three customers accounted for almost 100% of the company’s revenues through December 31, 2024.
  5. The price of Ethereum (ETH) is subject to significant volatility. To date, the Company has deployed a portion of the capital it has raised into ETH. Any negative changes to ETH prices could adversely affect the business and financial condition of the Company.
  6. Despite being a loss-making company, executives are being paid significant compensation.

    BTBT – Executive Compensation

As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!

Happy Trading!

Trades of the Day Research Team

READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.

Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.

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Source: Trades of the Day