Key Insights
- MSTR stock price has rebounded in the past few days as investors bought the dip.
- The company has rebounded due to the ongoing recovery in the Bitcoin price.
- Technical analysis points to more gains in the coming weeks as Bitcoin rebounds.
MSTR stock price has rebounded in the past few weeks as investors bought the dip and as Bitcoin jumped to a record high. It also jumped as investors bought beaten-down Bitcoin mining stocks, with technical indicators pointing to further gains.
MSTR Stock Price Technicals Points to a Rebound
The MicroStrategy stock price was trading at $362 on Monday, up by over 23% from its lowest level in September. This surge indicates that it has now entered a bull market.
The stock has some highly bullish patterns that may help to drive it higher. For example, it has moved above the upper side of the falling wedge pattern.
A falling wedge is a popular bullish reversal pattern, made up of two descending and converging trendlines. As the MSTR stock price indicates, a rebound typically occurs when the two lines are nearing their apex.
Other technical points to more gains in the coming weeks. For example, it bottomed closer to the 61.8% Fibonacci Retracement level, where most bullish reversal happens.
Oscillators have also turned upwards in the past few weeks. The two lines of the MACD indicator have formed a bullish crossover pattern, while the Relative Strength Index (RSI) has crossed the important neutral level at 50.
Therefore, the most likely scenario is one where the MSTR stock price continues to rise as bulls target the year-to-date high of $455, its highest level reached on July 17, which is approximately 26% above the current level.
MicroStrategy to Benefit from the Rising Bitcoin Price
The main catalyst for the MSTR stock price is that the Bitcoin price has been in a strong bull run in the past few days and recently soared to the highest level on record.
A strong Bitcoin price performance is a bullish sign for the company due to its substantial holdings. Strategy now holds over 640,000 coins, currently valued at over $79 billion.
In a statement, the management noted that its Bitcoin holdings recorded a $3.9 billion gain in the third quarter as Bitcoin price jumped.
Bitcoin Price Has Bullish Catalysts
Bitcoin will likely continue rising in the coming weeks as catalysts mount. One of the main catalysts is that investors are piling into Bitcoin, with the spot ETFs recording inflows of over $50 billion in less than two years. These funds now hold assets worth over $188 billion, representing 6.74% of the market capitalization.
At the same time, the Federal Reserve is likely to continue cutting interest rates this month, as economic risks remain at an elevated level.
One of the risks to the economy is that the government shutdown will likely remain for a few weeks. Polymarket traders expect the shutdown to last 21 days until a resolution is reached. If this is the case, it means that the Federal Reserve will meet without having the real data about the economy.
As such, the Federal Reserve will rely on private sector jobs numbers. A report released by ADP on Wednesday showed that the economy lost 36,000 jobs in October. Another one by ISM showed that the services PMI was weaker than expected.
Therefore, these numbers indicate that the Federal Reserve has a higher likelihood of cutting interest rates at its upcoming meeting, scheduled for October 29. Bitcoin normally does well when the bank is cutting rates.
Still, MSTR faces some potential risks ahead. The first one is that the ongoing MicroStrategy stock price rebound could be a dead-cat bounce. A DCB is a situation where an asset rebounds briefly and then resumes the downtrend.
The other major risk is that the company will continue diluting its investors in the near term. In an SEC filing, the company said that it has $15.9 billion shares available to sell. It also has over $30 billion of available preferred shares left to sell through its at-the-market offerings.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
