Metaplanet Stock Pattern Points to a Surge as it Nears Key Buy Zone

Metaplanet stock price is stuck in a deep bear market this month. It has collapsed by 58% from the year-to-date high, underperforming other Bitcoin treasury companies. However, technical analysis points to an eventual rebound of the Metaplanet share price.

Metaplanet Stock Price Could Surge Soon

The daily timeframe shows that the Metaplanet stock price has nosedived in the past few months. This plunge started on June 16 when it peaked at a record high of ¥1,925.

Metaplanet’s plunge was notable as it happened at a time when Bitcoin and the crypto market were in a strong surge. In theory, it stock should track BTC because of its vast holdings.

Metaplanet share price has plunged below the 50-day and 100-day moving averages, a positive sign of mean reversion.

The easiest way to predict the next price action for the stock is that it will continue falling. Additionally, the Average Directional Index (ADX) has risen to 38 and remains pointed upwards. A rising ADX indicator is a positive sign of increased momentum.

However, a closer look shows that it is nearing the important support level at ¥720. This key level coincided with the highest swing in February this year.

Whenever an asset makes a bullish or bearish breakout past a crucial resistance, it is common for it to retest it. This price action is known as a break-and-retest pattern, and is one of the most common bullish continuation sign.

Metaplanet share price has also formed a falling wedge pattern. Its upper side connects the highest swings since July, while the lower trendline links the lowest side since June.

The two lines of this wedge pattern are about to converge slightly above the break-and-retest point at ¥720. Additionally, the Relative Strength Index (RSI) and the Money Flow Index (MFI) are nearing their overbought levels.

Therefore, the most likely scenario is that it stages a strong comeback in the next few days. If this happens, the key level to watch will be at ¥1,925, the highest level this year, which is about 135% above the current level.

Conversely, a drop below that support level in a high-volume environment will invalidate the bullish Metaplanet stock price forecast.

Bitcoin Price as a Catalyst

The main catalyst that may drive the Metaplanet share price much higher is that the company has become a major Bitcoin accumulator. Data shows that the company has become the industry’s seventh-largest public Bitcoin treasury.

It acquired 775 Bitcoin last week, bringing its total holdings to 18,888. At the current Bitcoin price, these holdings are now worth over $2.14 billion, giving it a NAV multiple of 1.93.

This NAV multiple is much lower than the year-to-date high of 12 and is a sign that the company is becoming undervalued, especially as it continues its accumulation. It could also be a sign that the NAV multiple is becoming oversold.

The most recent results also demonstrated how it plans to continue growing. For one, it now plans to have at least 210k coins by 2027. As such, the ongoing Bitcoin price crash could be beneficial as it will allow it to buy cheaply.

Metaplanet’s Bitcoin yield is also growing and is expected to hit the target level of 25% this year. Yield is a key metric that looks at the ratio of its BTC holdings and its outstanding shares.

Metaplanet and other Bitcoin treasury companies are facing substantial headwinds as the industry becomes increasingly saturated, with the number of publicly traded holders surpassing 100.

The industry is also struggling as Bitcoin price retreats from its all-time high. However, on the positive side, the company’s technicals will help to boost its stock price in the coming weeks. If this happens, there are signs that it will jump and retest its all-time high this year, which would mean a 150% surge.