- MicroStrategy share price has moved into a bear market.
- This price is mostly because of Bitcoin price performance.
- Technical analysis shows that Bitcoin could slump to $25,000.
MicrosStrategy stock price has pulled back in the past few weeks as the crypto winter continued. It retreated to a low of $372.87 on Wednesday, meaning it has fallen by over 21% from the year-to-date high. This means that MSTR share price has moved into a bear market.
Bitcoin price is at risk
MicroStrategy is a leading company that provides data analytics services to some of the leading firms globally. It is a major company that makes over $500 million in annual revenue.
MicroStrategy, however, is well-known for its Bitcoin investments. It is the biggest whale in the sector with over 152,000 BTC coins in its balance sheet. These coins are now worth over $4.4 billion.
Therefore, MicroStrategy stock price tends to move in tandem with that of Bitcoin. For example, the shares plunged to a record low of $132 as Bitcoin retreated to $15,000. This performance also explains why MicroStrategy shares have retreated in the past few weeks.
The situation could get worse, as I warned in this article. As shown below, Bitcoin price has formed a double-top pattern at $32,000. In most periods, a double-top pattern is usually followed by a bearish breakout.
The double-top pattern’s neckline is at $25,000. Bitcoin has also dropped below the 50-day moving average while the Relative Strength Index (RSI) and the Stochastic Oscillator have been in a downward trend.
Therefore, there is a likelihood that Bitcoin price will drop to ~$25,000. A break below that level will open the possibility of the coin falling to $20,000. Such a move will push MicroStrategy shares downwards.
MicroStrategy stock price forecast
The daily chart shows that the MSTR stock price peaked at $476 in July. Recently, the shares have dropped and is stuck at the 50-day moving average. The price is also a few points above the crucial support at $348, the highest point on April 14th. It is also above the ascending trendline that connects the lowest levels since December.
Therefore, the outlook for MicroStrategy shares is bearish, with the initial support being at $348. A break below that level will see it drop to the next target at $300, which is ~20% below the current level.
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