NEAR Protocol
Bitcoin
Puffer
Hyperliquid
ZKsync
Pudgy Penguins
Pearl
Key Insights:
- MSTR stock price remains in a bear market this year.
- The shares will likely rebound as chart patterns point to a Bitcoin surge.
- BTC has formed a break-and-retest and a bullis flag pattern.
MSTR stock price crashed to a crucial support level this week as demand for Bitcoin treasury companies waned. Strategy was trading at $383 on Thursday, a few points above this month’s low of $366. Still, odds are that the stock will rebound as Bitcoin catalysts jump.
Why MSTR Stock Price Has Deviated From Bitcoin
Strategy’s stock price has deviated from Bitcoin this year. It has dropped by 30% from its all-time high even as Bitcoin hovers near its record high.
A likely reason for this is that investors have remained concerned about the soaring dilution. Data show that the company’s outstanding shares have been in a strong uptrend since 2020. It now has 261 million shares outstanding, much higher than 72 million in 2020.
MSTR’s dilution will continue as the company continues to raise money for BTC accumulation. Its long-term goal is to raise and spend $84 billion for this buying.
MSTR stock has also wavered as the Bitcoin Treasury industry has become highly saturated. Data shows that there are now over 100 such companies, with 961,760 coins in their balance sheets.
Some of the newest Bitcoin treasury companies are Trump Media, GameStop, MicroCloud Hologram, and Fold Holdings. As a result, Strategy stock has likely lost appeal among investors because they now have more options.
Most importantly, the MSTR stock price has crashed because of its valuation. Its NAV multiple has dropped from over 5 a few months ago to $1.454. Ultimately, there is a likelihood that the multiple will drop to par.
Bitcoin Price Rebound Could Fuel a Strategy Stock Surge
It is likely that the MSTR stock price will rebound in the coming weeks because of Bitcoin’s numerous tailwinds. A major catalyst will happen today, August 7, when Donald Trump signs an executive order allowing retirement funds like 401(k) to invest in the crypto industry.
This is a major catalyst because these funds now hold over $9 trillion in assets under management. A small allocation to Bitcoin could lead to higher demand and lift it to another record high.
The other key catalyst is that Bitcoin price has formed highly bullish technicals that will fuel more upside. The daily chart shows that BTC price has remained above the 50-day Exponential Moving Average (EMA), which has offered it substantial support since April.
Bitcoin price has also remained above the ascending trendline that links the lowest point on April 9, June 22, and August 2.
Most importantly, the coin has formed a break-and-retest pattern, which normally confirms a continuation. Therefore, these patterns point to an eventual Bitcoin price surge that will push it to a record high.
MSTR Stock Price Technical Analysis
Meanwhile, the daily chart shows that the MSTR stock price has crashed to an important support level that coincided with the 100-day Exponential Moving Average.
It was also along the lower side of the ascending channel. This trendline connects the lowest levels since April 23rd this year.
The channel resembles the megaphone pattern, which is made up of two ascending and diverging trendlines.
Therefore, the stock will likely rebound as bulls target the upper side of the channel at $456, which is about 18% above the current level.
On the flip side, a drop below the lower side of the channel will mean that there are still sellers ready to sell it. The next important support level to watch will be at $235, which is along the lowest point this year.
Summary
Strategy stock price has been in under pressure this year because of the rising competition in the Bitcoin Treasury industry.
This sell-off may be about to end as the company faces major tailwinds like the upcoming crypto executive order by Donald Trump and the highly bullish Bitcoin chart patterns. If this happens, the stock will likely jump above $500 soon.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
