Metaplanet Stock Slowly Forms a Bullish Pattern, But a Key Risk Remains

Key Insights:

• Metaplanet stock price has formed a bullish falling wedge pattern.
• It also remains above the 200-day moving average and a key support.
• The main risk is that Bitcoin has formed a rising wedge on the weekly.

Metaplanet stock price rose by over 5% on Wednesday, August 27, as Bitcoin and the crypto market bounced back. While this rebound is positive, the stock remains stuck in a bear market after falling by over 53% from its year-to-date high. This article explains why the stock may rebound soon and the key risk that could hinder this.

Metaplanet Stock Price Technical Analysis Points to a Rebound

The daily timeframe shows that the Metaplanet stock price has plunged in the past few weeks. This retreat has mirrored the performance of other Bitcoin Treasury companies like MicroCloud Hologram and MicroStrategy whose shares have plunged lately.

Metaplanet share price has plunged below the 50-day and moving averages, confirming that the bearish outlook is intact today.

However, some positives may trigger a rebound later this month or in September. First, the stock remains above the 200-day Exponential Moving Average (EMA). In most cases, this average is usually the most important support for an asset.

Second, the Relative Strength Index (RSI) recently moved below the oversold level and is now rising. It has moved to 40 and crossed the smoothing moving average. This is a sign that a bullish divergence pattern has started to emerge.

Third, the stock sits above the crucial support level at ¥720, the highest point in February this year and the previous all-time high. As such, it could be that the stock wants to retest this level, confirming a break-and-retest pattern, which is a common continuation sign.

Most significantly, Metaplanet’s share price is in the process of forming a falling wedge pattern. This pattern consists of two downward-sloping and converging trendlines. A bullish breakout normally happens when the two lines are about to converge, which is bout to happen.

Therefore, these technicals point to an eventual rebound, possibly to the psychological level of ¥1,000 or the all-time high of ¥1,925. However, a drop below the 200-day moving average and the support at ¥720 will invalidate the bullish Metaplanet stock price forecast,

Bitcoin Price Action is a Major Risk for Metaplanet

Metaplanet has become one of the most aggressive MicroStrategy wannabes. It has continued raising money to buy Bitcoin in the past few months.

Like MSTR, it has set a high bar for this accumulation and is targeting buying 210,000 coins in the next few years. At the current price of $110,000, these coins would be worth over $23 billion.

Metaplanet now holds 18,991 coins, meaning it must buy 191,009 more coins to hit its target. It bought 103 coins last week, and is now selling bonds to accelerate the purchases.

As a Bitcoin proxy, Metaplanet stock price will do well when BTC is thriving. However, technical analysis shows that the Bitcoin price may have peaked in this cycle.

The weekly chart shows that the BTC price has formed a highly risky rising wedge pattern. This pattern happens when there are two ascending and converging trendlines. A bearish breakdown typically occurs when the two tips of the trendlines converge.

BTC price has also formed another risky pattern known as a bearish divergence. The chart below shows that the Relative Strength Index (RSI) has formed a descending channel since March this year when the coin was rising.

Therefore, these patterns mean that Bitcoin price is about to crash, which will affect Metaplanet and other treasury companies.

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.