Can MSTR Stock Rebound 127% as Wall Street Experts Predict?

The MSTR stock price has crashed in the past few months, mirroring the performance of other Digital Asset Treasury (DAT) companies. Strategy was trading at $230 on November 12, and technicals suggest that it has more downside despite Wall Street analysts having a largely bullish outlook.

Wall Street Analysts Expect the MSTR Stock Price to Hit $525

Strategy share price has remained in a technical bear market after plummeting by over 48% from its highest level in September. Worse, the stock has plunged by 56% from its highest point in November last year.

Still, Wall Street analysts have embraced a highly contrarian outlook, with most of them maintaining a bullish outlook.

Data compiled by TipRanks shows that the average MSTR stock forecast among most analysts is $524, which would represent a 127% surge from the current level. As such, these analysts believe that the stock is currently a bargain that will ultimately bounce back soon.

The most recent analyst to deliver a bullish outlook for the stock is TD Cowen’s Lance Vitanza, who predicts that the stock will react rebound to $535, which is a few points below the average estimate by  Wall Street analysts.

Meanwhile, Andrew Harte, an analyst from BTIG, has a target of $630, much higher than the current level. The most optimistic is Mark Palmer, a top analyst at Benchmark, who has a target of $705.

Cantor Fitzgerald analysts see the stock hitting $560, while Canaccord Genuity expects it to rise to $474. Other analysts with a bullish MSTR forecast are from companies like Clear Street, Bernstein, and Mizuho Securities.

The general view among analysts is that MSTR is a good company that has become a bargain during the ongoing stock crash. Most importantly, some of these analysts believe that the Bitcoin price will eventually rebound, which will help to boost the performance of treasury companies.

Strategy Stock Faces Major Risks

While analysts are generally bullish on the MicroStrategy stock, the company faces substantial risks this year. The biggest risk is that the Bitcoin price is at risk of further downside now that all attempts to rebound are facing rejection. For example, its attempts to bounce back this week hit a major resistance at $106,000.

Bitcoin price has also formed numerous risky patterns on the weekly and daily timeframe charts. For example, the coin has formed a death cross pattern on the daily chart. It has also remained below the Supertrend and an Ichimoku cloud indicator, and even formed a double-top pattern.

The same has happened in the weekly chart, where it has formed a rising wedge pattern. This pattern is made up of two ascending and converging trendlines and often crashes when they are about to meet.

A Bitcoin price crash would hit MSTR stock hard because it’s now the biggest holder with 641,692 coins worth over $67 billion. A Bitcoin crash to $90,000 would bring its holdings value to $57 billion.

MicroStrategy Stock Price Technical Analysis

The daily chart shows that the MSTR stock price is at a significant risk of a crash. It formed the golden cross pattern on September 9, confirming the bearish breakout.

The stock’s Average Directional Index (ADX) has jumped to 34.32, its highest level since December last year. A soaring ADX is a sign that a trend in either direction is accelerating.

Additionally, the stock has formed an inverse cup-and-handle pattern, which is made up of a core support and a rounded top pattern. It is now in its lower side.

Therefore, the most likely scenario is where the stock either stabilizes or rebounds to form the handle section. It will then resume the downward trend and possibly fall to the support at $120. This target is identified by measuring the cup’s depth and then the same distance from its lower side