MSTR Stock Nears Make-or-Break Price as Industry Woes Mount

The MSTR stock price has crashed this year and is now hovering near a make-or-break level that may trigger more downside in the near term as woes in the Bitcoin treasury industry mounts. Strategy stock was trading at an important support level at $300, down sharply from the year-to-date high of $457 and last year’s high of $542.

MSTR Stock Price Technical Analysis

The daily timeframe chart shows that the MicroStrategy stock price has been in a strong downward trend in the past few months as demand for Bitcoin treasury companies waned. It has plunged by 35% from its highest level this year, meaning that it is in a bear market.

Worse still, the stock has largely invalidated the falling wedge pattern that has been forming over the past few months. This pattern consists of two descending and converging trendlines, often leading to a strong bullish breakout.

Now, the MSTR stock price has formed a death cross pattern, as the 50-day and 200-day Exponential Moving Averages (EMAs) have crossed each other. This pattern typically leads to further downside, as it indicates that bears have prevailed. Indeed, the Bull Bear Power indicator has moved to the negative zone since October 8.

The last time that the Strategy stock price formed a similar cross was in September last year when it formed a golden cross. At the time, it was trading at $145 and then it surged by over 240% to its all-time high.

Now, the MSTR stock price is trading at $300 and is poised to crash below the crucial support level at $292, its lowest point since September. Moving below that level will be notable, as it will invalidate the highly bullish double bottom whose neckline is at $367.

Therefore, the most likely scenario is that the MSTR share price will have a strong bearish breakdown, potentially to the key support level at $230, the lowest level in March this year. Such a move would represent a 25% decline from the current level.

The bearish MSTR stock price forecast will become invalid if it moves above the key resistance level at $367.

Bitcoin Treasury Industry Woes Are Rising

The ongoing MSTR stock price crash is likely to accelerate as the Bitcoin treasury industry experiences a major downturn. Some analysts note that the sector’s bubble is bursting.

One major issue is that companies have slowed down in the past few months. For example, MicroStrategy bought 220 coins last week, an improvement from the previous week’s 196. These numbers, however, pale in comparison to what it spent in September, when it acquired over 6,000 coins.

Another notable company is Metaplanet, the biggest player in the industry in Japan, which has not bought any coins in the past two weeks. Companies like Trump Media, GameStop, and Semler Scientific have not acquired Bitcoin for a while.

Another major concern in the industry is that the premium these companies had a few months ago has plummeted. Data shows that the mNAV has plunged to 1.196, down from the all-time high of over 8. Similarly, the mNAV based on the enterprise value has dived to 1.39.

Metaplanet, which boasted a premium of 22 a few month ago, has now moved below 1. That is a sign that its Bitcoin holdings are now worth more than the enterprise value. The NAV multiples of other companies, such as GD Culture, Semler Scientific, KindlyMD, and MicroCloud Hologram, have all moved below 1.

A falling NAV multiple is bearish for Bitcoin treasury companies because they primarily rely on the premium to raise capital, which they use to purchase coins.

The other major risk is that investors are shorting the company as they expect the price to plunge. MSTR stock has a short interest of 8%, which has risen gradually in the past few days.