50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

MicroStrategy ($MSTR) gargantuan buy - but stock continues to fall

Published 26/11/2024, 12:07
© Reuters.  MicroStrategy ($MSTR) gargantuan buy - but stock continues to fall
MSTR
-

Crypto Daily - With an absolutely huge $5.4 billion purchase of $BTC announced on Monday, MicroStrategy stock would perhaps be expected to rise. However, $MSTR is down 25% from its $540 high, and as per pre-trading, a further fall to $376 could take place.

There can be no doubting the genius behind Michael Saylor’s consistent debt raises that are used to buy $BTC. Since the beginning of 2023, $MSTR is up 2,660%. That said, the most recent massive purchase of 55,500 $BTC has not moved the dial to the upside, neither for $MSTR, nor for $BTC.

$MSTR falls through trendline

Source: TradingView

Looking at the short-term chart for $MSTR, it can be seen that the price has fallen through the ascending trendline. It is being held by the 0.618 Fibonacci, but with the pre-trading price still falling, it may be the 0.786 Fibonacci that ends up stemming this current drop.

Current reversal could still be bullish for $MSTR

Source: TradingView

Looking at $MSTR on the weekly time frame it can be seen just how strongly the price surged from the bottom of the bull flag in early August. Taking a Fibonacci extension from here up to the top, it can be noted that the price still hasn’t even gone down to the 0.382 Fibonacci yet, so if it reaches this level and bounces, it is actually a very bullish reversal.

A concern is at the bottom of the chart, in the Stochastic RSI. Here it can be observed that the indicator lines have just started to cross back down. It may be that the lines stay at the top for a while longer, as was the case back in mid November last year, through to early January. That said, they will have to come down at some point, bringing price momentum down with them.

$MSTR price rejects at 10-year ascending trendline

Source: TradingView

Zooming out further on the weekly time frame, it can be noted that an ascending trendline bisects the tops of price action in 2014 and into 2015, in February 2021, and just recently the price has been rejected from this same trendline.

Does all this mean that a top has been reached? Maybe. That said, the trendline is very steep, and therefore the price could continue to go up beneath it. The main sign of a top however would be if Bitcoin showed that it had reached a climax. The price is on the way down for $BTC, but the indications are that a bull market top has not been made yet. Therefore $MSTR should still have some upside runway.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

This content was originally published on Crypto Daily

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.