Strategy stock price has remained in a tight range in the past few weeks as Bitcoin has consolidated. MSTR was trading at $375 on Tuesday, down by over 12% from its highest point this year and 30% lower than the all-time high. This article provides a MSTR stock forecast and the key levels to watch.
Strategy stock price technical analysis
The daily chart shows that the MSTR share price bottomed at $231.70 in February, where it formed a double-bottom pattern with a neckline at $342.80.
A double bottom is one of the most bullish reversal patterns, which explains why it rebounded and reached a high of $429.87. The stock has now formed a bullish pennant pattern, comprising of a vertical line and a symmetrical triangle, a popular bullish reversal sign in technical analysis.
The two lines of this triangle are now nearing their confluence level, which happens before it stages a breakout. The profit target in a bullish pennant is estimated by first subtracting its lower side from its upper point.
In this case, one subtracts $231 from $429, giving the flagpole height of $198. The next stage is where one adds the breakout point to the height. This breakout level could be about $385, which will bring the target to $583, which is about 55% above the current level.
A drop below the support at $340 will invalidate the bullish Strategy stock price forecast. If this happens, the next point to watch will be the double-bottom point at $230.
Read more: This stock could nearly double your money in 2025—here’s why
The bullish case for MSTR stock
The main catalyst for Strategy stock is Bitcoin’s price action. A strong Bitcoin price surge will boost the value of its holdings and push its stock higher.
Strategy has continued to accumulate Bitcoins. In a statement this week, the company said that it acquired over 10,000 new coins, bringing its cumulative total to over 590,000.
Strategy has also insisted that it will not sell its coins anytime soon. Instead, the company is aiming to raise $84 billion to buy Bitcoin over time.
A bullish case can be made for Bitcoin, as we wrote here. First, the world is running out of Bitcoin as the supply on exchanges plunge. There are now over 1.1 million coins on exchanges. While this is a big number, the supply stood at over 1.5 million in January and 3 million in 2021.
Because of last year’s halving event, the number of Bitcoins being mined each day has crashed from 900 in April last year to 450 today. Companies like Strategy, MetaPlanet, and ETF issuers are buying all these coins.
Therefore, the supply and demand dynamics mean that Bitcoin price will continue doing well in the long term. Michael Saylor believes that the coin will jump to $1 million in the near term and $5 million in the medium term.
Ark Invest sees Bitcoin price surging to $2.4 million by the end of the year, while BlackRock sees it rising to $700,000.
Therefore, if Bitcoin jumps to these levels, it means that the MSTR stock price will be higher even if the current premium ends.
Bitcoin price technical analysis
The long-term Bitcoin price chart points to more gains. It has formed a giant megaphone pattern, which is made up of two ascending and diverging trendlines. This is one of the most bullish patterns in technical analysis.
Bitcoin price is attempting to break past the eight-year trendlines that connect the highest swings since December 17. It has also formed two large, rounded bottom patterns.
Therefore, Bitcoin price will likely have a strong bullish breakout in the next few months. The initial target will be $150,000, followed by $200,000.
Read more: Crypto market crash: is the Bitcoin and altcoin bull run over?
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