Metaplanet stock price has imploded and moved into a deep bear market after falling by 55% from its highest point this year. It plunged to a low of ¥800 in August, its lowest level this year. This article explores whether it is safe to buy Metaplanet shares.
Metaplanet Stock Technical Analysis Points to a Rebound
The daily timeframe chart shows that the Metaplanet share price has plunged in the past three months. On the positive side, the stock has formed a highly bullish falling wedge pattern.
This pattern consists of two descending and converging trendlines, with a bullish breakout happening when the two lines near their confluence, which is already happening. This explains why the Metaplanet stock has moved slightly above the upper side of the wedge.
Metaplanet’s stock price has jumped above the 200-day Exponential Moving Average (EMA), which has provided it with substantial support. A deeper correction would be confirmed if it moved below that level.
Most importantly, Metaplanet share price has remained above the important support at ¥720, the highest swing in February. In this case, Metaplanet shares remain bullish as long as they are above the support level, as they are exhibiting the popular break-and-retest pattern.
Therefore, the 200MA, the break-and-retest, and the falling wedge point to a potential rebound in September. If this happens, the next point to watch will be at ¥1,000, the major support and resistance (S/R) pivot point of the Murrey Math Lines. A drop below the support at ¥720 will invalidate the bullish outlook.
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Why the Metaplanet Shares are Dumping
Metaplanet stock price has dived as investors dump Bitcoin treasury companies this year. A closer look at most companies with BTC in their balance sheet has shown that they have tumbled as the sector has become highly saturated.
Strategy, the OG in the industry, has dropped by over 25% from its highest point in 2024. Similarly, companies like GameStop, MicroCloud Hologram, and Trump Media have all dived this year.
Metaplanet stock price has dropped as Bitcoin has moved into a correction. After soaring to a record high of $124,200 in August, BTC has dropped by over 11% to the current $108,000. Bitcoin strategy companies often react to the performance of BTC.
Metaplanet has also dropped due to its valuation, which is significantly higher than its Bitcoin holdings. Its Bitcoin holdings are valued at $2 billion compared to its market capitalization of $4 billion. As such, investors believe that it should be valued at the same level as its Bitcoin holdings.
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