Bitcoin miner IREN‘s stock is losing ground as costs tied to converting its data centers toward AI continue to pile up. For the first time, AI cloud revenues have surpassed those from Bitcoin mining, signaling a major strategic pivot — but a costly one. The stock is now trading in a short-term bearish setup, with critical support zones to watch closely.

Price Structure: A Stock in Full Retracement

IREN is displaying a marked correction dynamic from its recent highs. The ongoing retracement reflects investor concern over rising infrastructure spending tied to the AI transition. The stock has failed to consolidate above its key resistance level, which is reinforcing short-term selling pressure.

On the technical side, the RSI is sliding below the 40 threshold, signaling a momentum dynamic that is clearly tilted to the downside without yet reaching extreme oversold territory. The MACD confirms this signal with a recent bearish crossover, with the MACD line crossing below the signal line — a classic distribution pattern. As long as the stock remains below its 20-day moving average, any rally attempt will remain fragile and susceptible to being sold into.

Volume is accompanying the decline, which validates the directional nature of the move rather than simple market noise. A bullish breakout would require a forceful return above resistance levels backed by significant volume.

Bullish vs. Bearish Scenarios: Two Opposing Readings

Bearish scenario — The most likely in the short term. If current support levels give way under selling pressure, the stock could accelerate its decline toward lower valuation levels. The rising AI conversion costs with no clear visibility on return on investment represent a negative fundamental catalyst. The market tends to punish costly transition phases, especially in an environment where interest rates remain elevated and compress valuation multiples for growth companies.

Bullish scenario — Conditional. A bounce rally remains plausible if IREN delivers strong AI metrics demonstrating an acceleration in cloud revenues. The fact that AI revenues have surpassed Bitcoin mining for the first time represents a positive signal of structural transformation over the long term. A breakout above major resistance, accompanied by volume, could trigger a move back toward the stock’s previous ATH. Investors positioned on the AI theme could then take the baton from traditional miners.

Market Verdict: IREN Is Searching for a Floor Before Any Rebound

IREN‘s technical setup remains bearish until the stock finds a floor validated by a stabilization in volume and a reversal of the MACD. The pivot toward AI is strategically coherent in a sector where Bitcoin mining margins are being compressed post-halving, but the market is now demanding concrete proof of profitability.

The next key catalyst will be the release of financial results detailing the cost-to-revenue ratio of the AI division. If cloud margins grow faster than infrastructure spending, the stock has significant rally potential. If not, the correction could extend further, with the risk of a test of long-term support levels. Traders will be watching the RSI closely for any bullish divergence signal as the first indicator of a potential reversal.