Metaplanet share price has remained under intense pressure in the past few months. It has plunged from the year-to-date high of ¥1,926 in June to ¥550 today. This crash could accelerate as the stock has now formed the highly bearish death cross pattern on the daily chart.
Metaplanet Share Price Forms Death Cross Pattern
The daily timeframe chart shows that the Metaplanet stock price has plunged in the past few months. It has now moved from a high of ¥1,926 in June to the current ¥550.
Worse, the stock is now about to form a death cross as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. This is one of the most bearish patterns in technical analysis. It typically implies that there is weakening buying pressure and growing selling interest.
Indeed, the Bull Bear Power (BBP) indicator has remained below the zero line in the past three consecutive days. Also, the Relative Strength Index (RSI) has pointed downwards, a sign that the downtrend is continuing.
The stock has also invalidated the falling wedge pattern shown in black. This pattern often leads to more downside in the near term.
Therefore, there is a risk that the stock will continue falling as sellers target the key support at ¥300, the weak, stop, and reverse level of the Murrey Math Lines. This target coincides with the lowest point in March this year.
Falling mNAV and Bitcoin Buying Pause
One of the main reasons why the Metaplanet stock price may crash further is that the company’s premium has plunged in the past few months.
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Data shows that the company has a market capitalization of over $4 billion compared to its Bitcoin holdings of over $3.576 billion. This means that it has a basic mNAV multiple of 1.103 and a diluted mNAV of 1.387. These numbers have been on a strong freefall in the past few months, having peaked at over 8 earlier this year.
The plunging mNAV multiple means that the premium from a few months ago has now disappeared. This trend will likely continue if the death cross pattern works as expected.
As a result, the company will likely struggle to raise capital to accumulate more coins. This also likely explains why the company has not bought coins in the past two weeks.
Other companies in the treasury industry, including Michael Saylor’s Strategy, have had a similar performance in the past few months.
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