Bullish Outlook for Saylor’s MSTR Stock Following 70% Price Crash

The MSTR stock price has been in a strong freefall this month. Bitcoin and other Digital Asset Treasury (DAT) companies also continued their plunge.

Strategy stock dived to a low of $168, its lowest level since October last year. Still, there are a few potential catalysts that may push the MSTR share price higher in the near term.

MSTR Stock Price to Benefit from a Bitcoin Rebound as Analysts Predict

One potential catalyst for an MSTR stock price rebound is that Bitcoin could be about to rebound. In a CNBC interview on Monday, Anthony Pompliano said the ongoing crash was a good reset. He added that a rebound was on the way.

He argued that the crash reduced the substantial leverage in the crypto industry. He said it has brought the sector to a better place. Data shows that Bitcoin’s open interest has dropped from $94 billion in October to $59 billion today.

He now believes the upcoming Bitcoin rebound will be more sustainable. It won’t be driven by highly leveraged speculators.

Pomp also pointed to the Crypto Fear and Greed Index. It bottomed at a multi-year low of 8 during the weekend. Historically, a plunge in the index has led to a bull run.

Therefore, Pomp and other experts, including the Winklevoss Twins, believe Bitcoin will rebound. They expect it to hit a record high in the next few weeks or months.

Such a move will benefit Strategy, which has become the biggest holder with 649,870 coins. A rebound to the record high of $126,300 will push the value of its holdings from the current $56 billion to $82 billion.

Technicals Suggest that the Strategy Stock Price is Highly Oversold

Meanwhile, technicals suggest that the Strategy stock price has become highly oversold in the past few weeks.

Data shows that the Relative Strength Index (RSI) has plunged to the oversold level of 28. At the same time, the two lines of the Stochastic Oscillator have moved to the oversold level of 14. The Money Flow Index (MFI), which is a unique type of the RSI, has also moved to 25.

Historically, an asset tends to drop a bit whenever it gets to the oversold level. It is usually a sign that the bearish momentum is continuing. Most rebounds normally happen whenever an asset becomes extremely oversold.

A good example of this is what happened in February when the MSTR stock plunged to $228. Its rebound happened when these three oscillators moved to the oversold zone.

Rising Short Interest and Battle With JPMorgan and MSCI May Lead to a Rebound

MSTR stock price may rebound as it experiences a GameStop-like rage buying as its differences with JPMorgan and MSCI rise.

These differences emerged after JPMorgan warned the company could be delisted from most indices. The concern was tied to its sizable Bitcoin holdings. Such a delisting would push index trackers to dump the MSTR stock almost immediately.

The most recent data shows that MSTR’s short interest has jumped to 8.8% from last month’s low of 7.40%. As such, with short interest rising, the stock could face a short-squeeze. Similar events have happened with companies like GameStop, AMC, and Opendoor.

MSTR Stock Has Become a Bargain

The ongoing MSTR stock price crash has made it a bargain. Data compiled by BitcoinTreasuries suggests that the company’s market net asset value (NAV) has dropped to 0.906.

The mNAV, based on its enterprise value, has fallen to 1.167. A low mNAV figure is risky for the company because it has always used its premium to raise capital for Bitcoin buying.

Looked another way, the company could be seen as a bargain. Its Bitcoin holdings are now worth more than the entire company.