The MSTR stock price dropped for two consecutive days and ended the week at $120, down sharply from the all-time high of $542. This retreat may continue this week even as Michael Saylor hints at a restart of Bitcoin purchases.
Michael Saylor Hints of Bitcoin Purchases After a Week’s Hiatus
There are chances that Strategy, formerly known as MicroStrategy, restarted Bitcoin purchases last week. In an X post, Michael Saylor said that he was “back to work”, adding the orange dot chart that represents the company’s weekly Bitcoin buying.
Strategy now holds 762,099 Bitcoin, with a market value of over $50.9 billion. Its average Bitcoin purchase price is $75,699, meaning that the company has made a loss of 11.70%.
The company has room to continue its Bitcoin purchases now that has billions of dollars in at-the-money (ATM) shares that it can sell. It can sell its common shares and its preferred shares, including the STRC.
Using these shares to raise cash is risky for shareholders as it means more dilution, especially now that its net asset value (NAV) has dropped below 1, a sign that its premium has dropped.
The main risk for the MSTR stock price this week is that Donald Trump has threatened to escalate the ongoing war in Iran. In an X post on Sunday, he noted that Tuesday will be “Power Plant Day” and “Bridge Day”, a move that will lead to lower Bitcoin prices as we predicted.
Strategy stock price is affected by the performance of Bitcoin prices because of the vast amount of coins in its balance sheet. A continued retreat will affect the value of its coins, leading to a higher unrealized losses. For example, if Bitcoin went back to its all-time high of $126,300, the current holdings would be worth over $96 billion.
Strategy Stock Price Forecast: Technical Analysis
The three-day chart shows that the MSTR stock price has slipped in the past few months. It has dropped from $456 in July last year to the current $120.
It has dropped below the important support level at $232.7, its lowest level in March last year. The stock has formed a death cross pattern as the 50-day moving average dropped below the 200-day one.
The stock has remained below the Supertrend indicator since August last year. In technical analysis, an asset remains in a bear market as long as it is below this indicator.
Therefore, the MicroStrategy stock price will likely continue falling, with the next target being the psychological level at $100. A drop below that level will point to more selling, potentially to the key support level at $80.