Metaplanet stock price has crashed into a bear market and lost half of its value even as Bitcoin jumped to a record high. It was trading at ¥990 on Wednesday, down from the year-to-date high of ¥1,925.
Metaplanet Stock Crashes Despite BTC Surge
Bitcoin and Metaplanet share price have lost their close correlation. BTC has continued rising and is now hovering near its all-time high after soaring by over 67% from its lowest point in April.
While the Metaplanet stock price is up by 240% from its April lows, it has erased most of the gains and is now hovering near the lowest level since June.
There are three main reasons why the Metaplanet shares have crashed in the past weeks.
First, the decline is mainly because of its valuation, which was stretched at its peak. The NAV multiple, which compares its valuation and its Bitcoin holdings, stands at 2. That is because its BTC holdings are worth $2.2 billion, while the market cap is at $4 billion.
On the positive side, its NAV multiple is the lowest it has been since it started accumulation. Also, the spread between its NAV and that of MicroStrategy has narrowed as the latter has a multiple of 1.43.
Second, the Metaplanet stock price has dived as the Bitcoin Treasury space becomes highly saturated. There are now over 100 companies focusing on Bitcoin accumulation, a trend that is continuing.
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Third, there are concerns about its dilution as the management hopes to have 210,000 coins by 2028. As such, it will continue selling stock, and this will dilute its shareholders in the process.
Metaplanet’s outstanding shares have jumped to 459 million from 26 million in 2018. The management justifies the dilution by arguing that its Bitcoin yield has continued to soar.
The ongoing Metaplanet share collapse is also because of profit-taking among investors after it surged by over 10,000% from its lowest point last year. This profit-taking is also known as mean reversion, where an asset moves back to its historical averages.
Metaplanet Share Price Technical Analysis
The weekly chart shows that the Metaplanet stock price has crashed in the past few months, moving from a high of ¥1,924 to ¥993 today. It has moved to the 50% Fibonacci Retracement level, while the Relative Strength Index (RSI) has pointed downwards.
The stock remains above the 50-week moving average at ¥697, meaning that the mean reversion is not complete.
Therefore, the most likely scenario is that the stock continues to fall to ¥746, which aligns with the 61.8% Fibonacci Retracement level. This retracement level is commonly known as the golden ratio, where most reversals happen.
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