MSTR Stock Plunges as Bitcoin Risks Signal Steeper Crash

Key Insights

• MSTR stock price has crashed to the lowest level in years.
• Bitcoin price has formed several bearish chart patterns, pointing to more downside.
• There is a risk that the Strategy stock price will continue falling in the near term.

Michael Saylor’s MSTR stock price continued its freefall, reaching its lowest level since September 2024. Strategy has become one of the top laggards on Wall Street as it has crashed by over 75% from its all-time high.

Still, its technicals and fundamentals suggest that the stock has more downside to go in the coming weeks.

MSTR Stock Price Prediction: Technical Analysis Points to a Steep Crash

The weekly chart shows that the MicroStrategy stock price has been in a strong downward trend. Also, it is now trading at its lowest level since 2024.

The Average Directional Index (ADX) has jumped to 33, its highest level since March last year. It’s a sign that the downtrend is gaining momentum.

MSTR stock has remained below the 50-week and 100-week EMAs, which are about to form a bearish crossover pattern. This crossover would be a mini death cross, a highly popular bearish continuation sign.

The stock is now attempting to move below the Strong, Pivot, and Reverse levels of the Murrey Math Lines tool. This would confirm the strong downward trend.

It also remains below the Supertrend and the Ichimoku cloud indicators, a sign that bears are in control. Therefore, the most likely MicroStrategy stock price forecast is bearish, with the next key support level being at $100.

MSTR Stock to Crash as Risks Rise Ahead of Earnings

The next important catalyst for the MSTR stock price will be its corporate earnings. This will come out on Thursday this week. The company posted a big loss in the fourth quarter. Its Bitcoin holdings plunged and dragged down results.

In a recent statement, the company said that it made over $17 billion in losses in the fourth quarter. This loss happened as the Bitcoin price plunged by 25% during the quarter.

The company reported over $5.4 billion in unrealized losses during the year. Therefore, there is a likelihood that its losses will continue in the current quarter if Bitcoin doesn’t bounce back.

Just this week, the company suffered a $900 million unrealized loss as Bitcoin plunged to $74,000. That’s much lower than its average purchase price of $76,000.

The losses will mirror those of Metaplanet, a top Japanese company that has embraced its Bitcoin accumulation strategy. Metaplanet reported a big $680 million loss.

At the same time, the company’s premium has disappeared, with the net asset value (NAV) falling below 1. The NAV multiple’s crash below 1 is a sign that the business model it created is no longer working.

Other Bitcoin treasury companies like Metaplanet and American Bitcoin have seen their premiums tumble.

The company continued to dilute its shareholders by continuing to sell shares to buy Bitcoin. Its outstanding shares have continued rising in the past few months.

It’s a trend that will continue as Michael Saylor has insisted that the company will continue to buy Bitcoin. This dilution explains why the company’s short interest has jumped to over 12%.

Bitcoin Price Technical Analysis Points to More Downside

MicroStrategy stock faces another major risk. Bitcoin has formed bearish chart patterns that signal more downside. It has moved below the 38.2% Fibonacci Retracement level at $84,680. Additionally, the coin has plunged below the Strong, Pivot, and Reverse levels of the Murrey Math Lines tool.

The coin has moved below the 50-week and 100-week Exponential Moving Averages (EMA) and the Supertrend indicator.

Additionally, the Relative Strength Index (RSI) and the MACD indicators have continued falling. It’s a sign that the momentum is continuing.

Bitcoin price will likely keep falling. Sellers are targeting the ultimate support level at $50,000. That level sits about 35% below the current price.

Therefore, more downside is a sign that the stock and coins will continue falling in the coming weeks.

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