MicroStrategy’s Stock Surge After Bitcoin Investment
MicroStrategy (MSTR) shares experienced a remarkable increase of almost 10% on Monday and have continued to grow in the past week. This increase followed a regulatory filing indicating they purchased an additional 6,911 bitcoins between March 17 and March 23. This purchase puts the company’s holdings above 500,000 BTC, reinforcing their existing bitcoin strategy while further solidifying their position as the world’s corporate bitcoin leader.
Investors React to Corporate Bitcoin Accumulation
MicroStrategy’s purchases of Bitcoin, which started in 2020, seem to be never-ending. With shares valued at $335.72 on Monday, MicroStrategy has now seen a 16% growth since the start of the year and more than double the growth over the last year. Seeing these returns, investors clearly view the stock incorporating leverage on bitcoin investment, which means it is basically moving in sync with bitcoin value. Thus, in unison with Bitcoin value rising, MSTR gained 10.4% on stock price.
Technical Analysis of MicroStrategy: Support and Resistance Levels
Let’s conduct a technical analysis of MicroStrategy’s stock and determine where we expect its price to trend in the future.
- Buyers Emerge at 200-Day Moving Average
After retracing in conjunction with the closely monitored 200-day moving average, MicroStrategy shares languished within a range for several weeks before attracting renewed buying interest. More recently, the stock has the potential of continuing its uptrend as it closed above the 50-day MA on Monday and the 50-day MA has historically served as a reliable support level. In the meantime, the relative strength index (RSI) demonstrates a value greater than 50, indicating bullish price movement but also showing signs of cooling down before facing an extreme, suggesting healthy potential for the stock to rise further.
- Major Overhead Areas to Monitor
The initial area of interest sits closer to $383. From that point, the shares could face a psychological hurdle around this value in proximity to a number of highs and lows that were registered on the chart from mid-November to late January. Purchasing above that level may initiate the path toward the value around $543. In MicroStrategy’s case, those who bought shares during the stock’s decline are more likely to want to take their profit just below the all-time high (ATH) set in November last year.
- Identifying Strategic Prospective Goals
Using the bars pattern tool, investors can set an overhead target above the all-time high (ATH). This is done by taking the stock’s trending move from September to November of last year and repositioning it at the 200-day Moving Average (MA), the same indicator where the previous upward move started from. This analysis determines a target of approximately $870, suggesting further price increases may happen until late May if the movement agrees with the forecast.
Investors need to focus first on the $232 level, which is the most probable point on the chart of the stock’s price that can be expected to support the upward trend, just below the early November profit-taking low and the recent lows in February and March. Finally, a more significant drop may take place, allowing MicroStrategy shares to move back down to lower support around $180. Investors are likely to look to acquire shares around this price level, which is near a horizontal line that connects several important peaks on the chart from March to July of last year.
A Leveraged Bet on Bitcoin
Investors in MicroStrategy still maintain a keen interest in how the company’s stock is performing in relation to its Bitcoin holdings. They also follow other cryptocurrencies that MicroStrategy has invested in. As the MicroStrategy stock performs, investors closely analyze the forecasts provided by technical analysis while taking into consideration the many unpredictable factors acting on the stock and crypto markets. The strategy used by MicroStrategy represents a leveraged bet on Bitcoin’s future and will continue to progressively advance as the value of Bitcoin changes.
