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Key Insights:
- Wall Street analysts see the MSTR stock price jumping to $564.
- The bullish case is that it will benefit from its Bitcoin holdings.
- Technical analysis shows that MicroStrategy stock faces an uphill battle to get to this target.
MSTR stock price remains in a deep sell-off as investors lose interest in Bitcoin treasury companies. MicroStrategy stock price was trading at $340 at press time, down by 25% from its all-time high. Still, Wall Street analysts see the stock rebounding to $564, up by nearly 70% from its current level.
Wall Street Analysts are Bullish on the MSTR Stock
Many Wall Street analysts are still optimistic that the MSTR stock has more upside in the next 12 months. In a report on Tuesday, Mark Palmer, an analyst from Benchmark, delivered a highly bullish estimate, boosting his outlook to $705.
Similarly, Lance Vitanza from TD Cowen placed his target at $640, down slightly from the previous target of $680. Other bullish predictions came from Cannacord Genuity, Bernstein, and Mizuho.
Altogether, the average estimate among analysts is that the stock will bounce back and hit $564 in the next 12 months.
Extremely bullish estimates are highly contrarian, considering that MSTR and other Bitcoin treasury companies have lost favor from investors. MSTR and companies like GameStop, Trump Media, and Metaplanet have plunged in the past few months.
Still, some prominent players on Wall Street are a bit sceptical about MicroStrategy. One of the main names is Jim Chanos, a prominent short-seller who has placed a short bet on the company. He cited its high premium to its net asset value and criticized its approach of borrowing to buy Bitcoin.
Similarly, the short interest has jumped to almost 9%. It means many investors are betting against the company.
Bullish Catalysts for MicroStrategy Stock
The most bullish outlook is that the company will benefit from the potential Bitcoin price surge. While Bitcoin price has dropped in the past few weeks, it may surge as the Federal Reserve starts to cut interest rates, possibly in this month’s meeting.
A Bitcoin price rebound will benefit Strategy, which has become the biggest holder globally. It now holds 636,505 Bitcoin, currently valued at over $71 billion.
Strategy is also planning to accumulate more coins over time, with the eventual goal of raising $84 billion.
The other potential catalyst for the MSTR stock is that it has become less overvalued. Data shows that the difference between its market capitalization and Bitcoin holdings is about $26 billion. While that’s a big gap, the net asset value (NAV) multiple has dropped to 1.37, down from 3.1 in November.
MSTR Share Price Needs to Overcome Technical Risks
The Strategy stock price will have to overcome major technical risks to hit the Wall Street target of $566. As the chart below shows, it has formed a double-top pattern at $430 with a neckline at $358. A double-top is a significantly risky pattern.
MSTR stock could also be at risk of forming a death cross pattern. This is a risky pattern that happens when the 50-day and 200-day Weighted Moving Averages (WMA) cross each other.
The stock has also moved below the Ichimoku cloud indicator, and is in the process of forming a bearish flag pattern. Also, top oscillators like the Relative Strength Index (RSI) have continued falling. Therefore, the MSTR share price could be at risk of a downward spiral in the coming weeks.
It will need to move above the year-to-date high of $456 to climb to the target price at $566.
Summary
MSTR stock price has slumped in the past few weeks, mirroring the performance of other Bitcoin treasury companies.
While analysts see the company rising to $566, technical analysis shows that it may be at risk of further downside. It must move above the important resistance level at $456 to avoid further fall.
If the stock price falls further. it could possibly retest the important support at $230, which was its lowest level in March.
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.
