Metaplanet stock price continued its strong downtrend as it plunged to a low of ¥3,350, its lowest level since May 23rd and 54% below its highest level this year. This article explains why the company is decoupling from Bitcoin and what to expect.
Why Metaplanet Stock is Decoupling from Bitcoin
Metaplanet share price has crashed in the past few weeks. This crash happened even on Monday last week when the Bitcoin price jumped to a record high of $124,200.
Metaplanet’s performance has mirrored that of other Bitcoin treasury companies. For example, the Strategy stock price also remains in a bear market after plunging by double-digits from its highest point this year. Other treasury stocks, such as MicroCloud Hologram and Trump Media, have all plunged.
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A likely reason for the ongoing crash is the valuation. Metaplanet now holds 18,888 coins, currently valued at $2.2 billion, while its market capitalization stands at $4 billion.
It has a NAV multiple of 1.96. If the NAV falls to 1, it means that the stock could plunge to as low as ¥398.
In other words, the current Metaplanet stock valuation leaves a $1.8 billion valuation gap that investors want to fill. The same explains why the MSTR NAV ratio has tumbled to 1.4 from last December’s high of 3.3.
Metaplanet share price is also falling as investors book profits after the recent surge. At its highest point this year, the stock was up by over 10,000% from its lowest point last year, helped by its Bitcoin accumulation.
There are other reasons why the stock has plunged. For example, the drop is likely because of the rising number of Bitcoin treasury companies, which have jumped to over 100.
These firms attracted a premium valuation when there were a few of them, as they were seen as better alternatives to Bitcoin ETFs because they did not have an annual fee. They have now lost the appeal as the NAV multiple has narrowed.
Metaplanet Share Price Technical Analysis
Metaplanet stock chart | Source: TradingView
The daily timeframe chart shows that the Metaplanet stock price has crashed in the past few weeks. It has plunged from a high of ¥1,925 in July to a low of ¥900 today.
It has plunged below the 50-day and 100-day Exponential Moving Averages (EMA). The MACD and the Relative Strength Index (RSI) have continued moving downwards.
On the positive side, the stock has formed a highly bullish falling wedge pattern. This pattern comprises two descending and converging trendlines.
The two lines are about to converge, pointing to an eventual surge in the coming days. If this happens, the next important level to watch will be the psychological point at ¥1,000 and the 50-day moving average at ¥1,162.
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