Key Insights
- MSTR stock price has crashed in the past few months, shedding billions in value.
- Bitcoin price has formed a rising wedge and a bearish divergence on the weekly chart.
- It formed a death cross pattern on the daily timeframe chart.
The MSTR stock price has shifted from one of the best performers on Wall Street to a major laggard. Strategy dropped to a low of $260 on Tuesday, down sharply from the all-time high of $543. This crash will likely continue now that Bitcoin has formed numerous bearish chart patterns on the weekly and daily chart.
MSTR Stock Price Technical Analysis Points to a Crash
The weekly chart shows that the MSTR stock price peaked at $542 in November of last year, as demand for Bitcoin treasury companies surged.
Recently, however, the stock has lost momentum and dropped by over 52% from its highest level in 2023, as the industry became saturated and valuation concerns persisted.
The stock formed a double-top pattern at $456 and a neckline at $230. This pattern is one of the most bearish patterns in technical analysis.
The distance between the double top and the neckline is approximately 50%. Measuring the same distance from the neckline points to a plunge to $112. This is an important target price, as it coincides with the 78.6% Fibonacci Retracement level.
The MSTR stock price has already moved below the 50% Fibonacci Retracement level and is slowly approaching the neckline of the double-top pattern.
Additionally, the stock has moved below other common trend indicators like Supertrend and the Ichimoku cloud, which is a sign that bears are in control. Similarly, the Relative Strength Index (RSI) and the Stochastic Oscillator have continued to fall.
Therefore, the stock will likely continue falling in the coming weeks, especially if the ongoing crypto market crash accelerates.
Bitcoin Price Has Formed a Rising Wedge on the Weekly Chart
Strategy has two businesses: software and Bitcoin accumulation. It has become the biggest Bitcoin accumulator in the world and currently holds 641,205 coins currently valued at over $66 billion. Its most recent acquisition happened last week when it added 397 Bitcoins to its holdings.
The MSTR stock normally does well when the Bitcoin price is in a bull run as that normally boosts the value of its assets. For example, its current holdings would be worth over $81 billion if it remained at its all-time high.
There is a likelihood that the Bitcoin price is on the verge of a multi-month downtrend after it formed a giant rising wedge pattern on the weekly chart. This pattern consists of two ascending and converging trendlines, with a breakout occurring when they intersect at their confluence.
Bitcoin has now moved below the lower side of this pattern, which may lead to further downside in the coming weeks. At the same time, it has formed a series of bearish divergence patterns, as the Relative Strength Index (RSI) and the MACD have created a series of lower lows despite the continued rise.
BTC Price Has Formed More Bearish Patterns on the Daily Chart
Meanwhile, the daily chart points to more downside in the coming days as it has formed numerous bearish patterns. The first notable one is known as the head-and-shoulders pattern. In this case, the head is at $126,168, while the shoulders are at between $116,000 and $117,000.
Bitcoin is now attempting to move below the neckline, which will confirm the bearish breakout. It has also dropped below the 38.2% Fibonacci Retracement level and is attempting to pierce the weak, stop, & reverse point of the Murrey Math Lines.
Most importantly, the coin has formed a death cross pattern, which happens when the 50-day and 200-day Weighted Moving Averages (WMA) crossed each other.
Therefore, the coin will likely continue falling, potentially to the ultimate support level at $100,000. It may move to the esteem oversold level at $93,750. A move to these levels will point to more downside for the MSTR stock price.
The post MSTR Stock Forecast as Bitcoin Price Risky Patterns Point to Crash Below $100k appeared first on The Market Periodical.
