Summary Riot Platforms faces significant downside risk in 2026 due to a likely Bitcoin bear market and high operational leverage to BTC price cycles. Technical indicators for both BTC and RIOT signal bearish momentum, with RIOT's head & shoulders pattern and weak RSI/MACD suggesting a move to single-digit share prices. RIOT's cost to mine, including depreciation, is $89k per BTC, exposing the company to material net losses if BTC remains below this level in 2026. Despite potential long-term upside from the Corsicana facility, near-term CapEx and premium valuation heighten downside risk; selling is advised until cycle lows are reached. Riot Platforms ( RIOT ) is facing some serious fundamental and technical risks for 2026. My theory is that Bitcoin ( BTC-USD ) is repeating its crypto winter or bear market, which occurs every four years. The last two price cycles were consistent, lasting exactly 1,050 days from the price bottom to the price peak . My theory is that this price cycle already peaked in October 2025, which would have marked the same length of time from the price bottom from the end of 2022. Bitcoin's bear markets tend to last about one year from the peak price. Since Riot's stock price action is highly correlated to bitcoin's, the stock is likely to experience a significant drop. Riot's stock tends to decline over 95% during the bitcoin bear markets. So, it is not worth owning Riot during the bear markets. I don't know if Riot will drop that drastically this time, but the stock does tend to decline more than bitcoin percentage-wise during the crypto winters. Bearish Technical Set-up Bitcoin (BTC-USD) Monthly Chart w/ RSI & MACD (TradingView) Bitcoin's monthly chart supports my thesis that we are already in the crypto winter for this price cycle. Bitcoin's bear markets have been confirmed when the MACD makes a bearish crossover. This occurs when the blue MACD line crosses below the red signal line and the histogram bars turn red. The bearish crossover occurred in November as Bitcoin made a significant drop from over $100k down to about $80k before recovering. What also stands out about the price cycles is that bearish divergences formed at the peaks. A bearish divergence occurred from April 2021 to November 2021 as bitcoin's price made a higher high while the RSI made a lower high. The same thing occurred from December 2024 to October 2025. Bearish divergences like this typically result in significant reversals from what I have observed. Riot Platforms (RIOT) Weekly Chart w/ RSI & MACD (TradingView) I provided Riot's weekly chart to display the head & shoulders pattern that formed from July 2025 to November 2025. July formed the left shoulder, while November formed the right shoulder. The head of the pattern formed in October. Head & shoulder patterns tend to result in significant drops to key support levels in my observations. These support levels are in the single digits for Riot's stock. That is where I think the stock is headed in 2026. Riot's weekly chart is already bearish as the RSI moved below the 50 level. The MACD is also bearish, as the blue line crossed below the red signal line while the histogram bars turned red. I expect the stock to test the $10 to $12 area before dropping further to the $6 area in 2026. If the price breaks below $6, the stock could drop to the low single digits. Riot's stock did drop to the $3 to $4 range in the last price cycle. Of course, this time, Riot may have peaked at a much lower price than previous price cycles, so we could see a very low price at the bottom of this bear market. Riot's Fundamental Issues While I believe that bitcoin's price action will have the biggest impact on Riot's stock in 2026, the company also has some fundamental issues that could derail the stock. The main fundamental issue for Riot has been the struggle to maintain and grow profitability. I do acknowledge that Riot benefitted from Bitcoin's higher prices in 2025. The company's cost to mine bitcoin , excluding depreciation, was $46,324 in Q3 2025. However, the cost to mine when bitcoin miner depreciation is included was about $89,000. Riot is at risk of significant net losses as the price of Bitcoin dropped to $87,000. My opinion is that the price of Bitcoin will continue to decline in 2026 as part of its cycle's bear market or crypto winter. The price of Bitcoin has historically dropped about 80% during the year-long bear markets. A similar drop this cycle could take the price down to $25,200 from the high of $126,000 in this bear market. It may not drop that far, but the possibility is there. If the price of Bitcoin does decline in 2026 and remains lower than Riot's $89k cost to mine, it would likely cause Riot to experience a net loss for the year. Margins are likely to be significantly narrowed if this occurs. Analysts estimate that Riot will have an EPS loss of -$0.52 for 2026 . This would be an over 4x higher loss than the expected EPS loss of -$0.12 for 2025. Such a large increase in net losses is likely to drive the stock lower in 2026. Riot has been developing its Corsicana facility over the past few years. When Corsicana is completed, it is expected to generate 1 gigawatt ((GW)) of bitcoin mining and data center hosting power. However, Riot currently only has 400 megawatts online for bitcoin mining operations. This leaves 600 megawatts left to be built out and utilized. Riot plans on using the remaining capacity for critical IT infrastructure. This is likely to be used for AI and high-performance computing applications. It may take a few years to get the remaining 600 megawatts up and running. This means that the cash flow from the 400 megawatts may not compensate for the unused portion of Corsicana in the short term, especially in 2026. Construction of the two Core and Shell buildings for the data center portion of Corsicana is expected to begin in Q1 2026 and is not expected to be completed until 2027. Riot will be incurring CapEx of $214 million within the next 18 months for these 2 buildings. While I think that Corsicana can be a positive driver of long-term growth for Riot, I think it will hurt margins in 2026 due to the high costs associated with it. The high costs may put negative pressure on the stock in 2026. Valuation Since Riot Platforms is not yet sustainably profitable, I used the price/sales ratio for the valuation. Riot is trading with a forward price/sales of 7.8x . This is more than 2x higher than the sector median price/sales of 3.4x. Riot is expected to earn $757 million in revenue in 2026, according to consensus estimates. This would be 14% higher than the $663 million in revenue that analysts expected Riot to earn in 2025. That's not bad revenue growth. However, if Bitcoin's price continues to decline in 2026 as part of a bear market, the revenue estimate could be lowered. Plus, the expected net loss could be worse than expected. Since Riot is trading at a premium valuation as compared to the sector median, I think the stock is poised to drop further. The valuation is likely to be reset as it typically does during bitcoin bear markets. Data by YCharts We can see in the chart above that Riot's forward price/sales ratio dropped to about two at the price bottom of the last bitcoin bear market back in early 2023. It looks like the forward price/sales is trending further down as the bitcoin bear market continues. It is likely that it will continue to drop to the low single digits in 2026 if this bear market is similar to the previous one. Risks to the Thesis My thesis that Bitcoin will have a bear market that is similar to the previous price cycles might turn out to be different this time. Some analysts believe that this time is different because more institutional investments into Bitcoin will lead to an avoidance of the bear markets of the past. Higher demand from large investors could provide better support for bitcoin's price. However, people were saying something similar back in 2021, but a year-long bear market occurred anyway. It is also possible that Riot performs better than I expect if the price of Bitcoin remains above the $89k cost to mine for most of 2026. Riot could beat analysts' expectations, driving the stock higher. The Bottom Line If you believe that Bitcoin and Riot will experience a year-long bear market that is similar to previous price cycles, selling your shares will probably be a wise decision. Riot's stock price tends to drop significantly during the bitcoin bear markets. Bitcoin and Riot may bottom approximately in September 2026 if this price cycle is similar to previous cycles. At that point, we can evaluate if buying back in would be a good idea.