Strategy: Finally Time To Buy Again (Technical Analysis)

Summary MicroStrategy offers a compelling buy opportunity after recent declines, supported by both technical and fundamental ￰0￱ and Bitcoin are positioned for a potential rally, driven by macro tailwinds, dovish Fed signals, and bearish sentiment. Technically, MSTR is in an accumulation range with significant upside if Bitcoin rallies, and the NAV premium is historically ￰1￱ remain if Bitcoin fails to hold key support, but the risk/reward setup favors substantial upside for MSTR if crypto markets ￰2￱ Summary MicroStrategy ( MSTR ) has been sliding down for the last 3 ￰3￱ after the recent crypto flush out, and given the nice bounce from the recent lows, I believe there’s a good setup for MSTR and potentially Bitcoin (BTC-USD) going forward.

MSTR’s dip looks buyable, both in terms of technicals and fundamentals. A Quick Recap My last MSTR post was almost six months ￰4￱ then, I made the case that MSTR was reaching a buyable ￰5￱ the stock did go on to rally over the next month or so, we have been in a steady slide since ￰6￱ recently, I spoke about Bitcoin looking toppy , but with room for a final rally into the $150,00 ￰7￱ the latest flush out in crypto, which saw $20 billion in capital wiped out, I believe we now have the right set-up in Bitcoin and Strategy to see a meaningful bounce, perhaps even new all-time ￰8￱ Fundamentals The fundamentals still look supportive of higher Bitcoin ￰9￱ “debasement trade”, which I covered recently in this post, is very much still in ￰10￱ current administration wants to outgrow the deficit and do so with the help of a dovish ￰11￱ inflation data coming out today weaker than expected , the road may now be clear for more cuts, and Powell has even talked about ending QT in the near future.

Plus, as I highlighted in my last gold article, the spectacular rally we have seen in gold could soon be followed by a similar rally in Bitcoin, if history is to repeat ￰12￱ Fear And Greed (CMC) All this at a time when Crypto sentiment is still quite ￰13￱ is when you buy, not when you ￰14￱ in all, there’s a good confluence of macro tailwinds, bearish sentiment, and positioning that tells me we could be in for another fast and furious ￰15￱ Technicals From a technical perspective, this seems like a good risk/reward setup. Let’s start by looking at the underlying asset, ￰16￱ TA (Trendspider) For the time being, Bitcoin has bounced beautifully off the 200-day EMA, for now, and this could set the low.

Ideally, I would love to see a quick double bottom form, much like we saw back in March, with a quick dip below the 200 EMA, finding support at $97K and potentially forming a larger bullish divergence with the RSI. Now, let’s look at ￰17￱ 1 Day chart (Trendspider) Like Bitcoin, MSTR looks like it could be close to a ￰18￱ RSI has trended higher over the last few weeks, though arguably we are still below the key EMAs, so the chart looks a bit ￰19￱ 1 week chart (Trendspider) Zooming out to the weekly, we can see that MSTR is within an accumulation range that has been going on for ￰20￱ saw this happen back in March 2024 before the big rally, and this could be a ￰21￱ Bitcoin, there’s room for a slight retest of lower lows, but either way, this price today seems quite good if we are indeed expecting a significant rally.

A simple retest of recent highs would imply a 60% rally from today’s price, which is nothing to scoff ￰22￱ over Bitcoin? I would defend owning both, but I would expect MSTR to outperform Bitcoin if it rallies to new ￰23￱ current NAV premium for MSTR is historically low, close to 1.2, and I’d expect this to increase as Bitcoin rallies. Why? Firstly, because MSTR already has Bitcoin in its balance sheet, this increases its leverage ￰24￱ whole strategy behind Strategy works when Bitcoin is rising, and that is a reason there’s a ￰25￱ the other hand, FOMO and sentiment should also make retail names in crypto catch a ￰26￱ short interest near 10%, this also gives MSTR some short squeeze ￰27￱ There’s also the chance that the Bitcoin cycle has ended, and we don’t actually see new highs for some ￰28￱ is a distinct possibility investors should not ￰29￱ are nearing what would be the end of the Bitcoin 4-year cycle, and we are near important levels of support after the recent ￰30￱ Bitcoin breaks below $90K, this would be a big hit to my bull ￰31￱ Thoughts All in all, I like the setup right now for MSTR and ￰32￱ could be risky, of course, but there’s plenty of upside ￰33￱ Bitcoin breaks towards new all-time highs, there’s room for MSTR to even double from here.