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MicroStrategy $MSTR | MicroStrategy’s Bitcoin Bet Sees 20% DropMicroStrategy NASDAQ:MSTR | MicroStrategy’s Bitcoin Bet Sees 20% Drop Feb28'25 With recent downturns in the crypto market, Bitcoin's sharp drop has significantly impacted companies like MicroStrategy NASDAQ:MSTR , which has heavily invested in crypto. I've kept this analysis updated for my students throughout the week and figured I'd post it publicly. This is what I would personally look at before entering trades, everything is subject to change on a daily basis and as I analyze different timeframes and ideas. ENTERTAINMENT PURPOSES ONLY, NOT FINANCIAL ADVICE! trendanalysis, trendtrading, priceaction, priceactiontrading, technicalindicators, supportandresistance, rangebreakout, rangebreakdown, rangetrading, chartpatterntrading, chartpatterns, spy, btc, bitcoin, mstr, micro, microstrategy, strategy, cryptocurrency, cryptodrop, cryptotrend, memecoins, crypto, digitalcurrency, digitalassets, mstrdrop, btcdrop, bitcoinidea, mstridea, mstranalysis, btcanalysis, cryptoanalysis, cryptotrades,
NASDAQ:MSTR
by TonyAiello
The Case for a 76% drop on MSTR: Norms of fib levels in a trend.If you draw a fib from the high to the low of the 2022 drop in MSTR, you'll see we have now completed all of the fibs of this swing. In this post we're going to take a detailed look at two things; 1 - How a trend typically forms heading into a 4.23 extension. 2 - What typically happens at 4.23 extensions. Everything we cover here will be generic rules for trend development. It's equally valid on bull and bear moves (we'll use examples of both) and it can be used on any timeframe. We're going to stick to big charts for this but these same concepts also scale down to day trading. We are going to look at these specific hypothesis'; 1.27 - 1.61 will produce some sort of pullback. The breaking of 1.61 will produce a steady trend to at least 2.20. Around 2.20 - 2.61 there will be some sort of reaction. The move from 2.61 to 4.23 is very strong. 4.23s can mark the end of major moves. These conditions in MSTR are marked into the chart pic. Let me show you another example on a bear trend to get us started. This was the last bull swing before the 2007-2008 reversal. We're using the topping swing for our fib. We can draw this really early as soon as we see the first possible break. We drop to the 1.61 and then we bounce. It looks like a recovery in real time. Then once the 1.61 is broken we drop quickly to the 2.20. Look closely here. The move to the 2.20 isn't the big red candle. There's a wick. That tells us this was a flash event. Crashed to the support, rapid bear trap. Filling our conditions of the expectations of a 1.61 break and the reaction 2.20. The wick candle pullback went to around 1.61 and then there was capitulation when the 2.61 was broken. We get to the the Final Boss of the fibs. The 4.23. There's a head fake under it and then a recovery back over it. And the 2008 crash is over. Want another one? Here's BB. The pattern expressed over a very long time. Full booms and bust. Saw a lot of these patterns in 2021. Imagine if you could have used the same playbook we can observe on the all time BB chart and used the same set of rules to understand all the key parts of the 2021 trend. That'd be weird. Attached is a pic of the real time 2021 mention of fading the BB rally at the 4.23 (just to show this isn't just perfect fitting after the fact). Let's jump back to another low. Here was the BTC low. Or a bull one. What Happens at 4.23 Fibs? Most of the time when 4.23 fibs are hit there is a large correction or a full blown reversal. Cases of 4.23's breaking without retesting the 1.61 - 1.27 (and that's a crash, big move) are rarer. In the times there is a 4.23 breakout, the following trend is usually exceptional. When looking at big instances of failed 4.23s they're usually found around the middle of a bubble or crash (depending on if it's a bull or bear break). It's much more difficult to show examples of the failed ones without being able to zoom in and out a lot, but you can look for them in places like the Nasdaq bubble, NVDA rally and in failure points of uptrends heading into crashes. Almost invariably, the trend goes into a state of hyper performance if the 4.23 is broken. However, if it is not broken - then we're usually going to ultimately end up spiking out the 1.27 fib. Which round trips most of the move. If MSTR is a 4.23 blow off, it's give up most of the gains of the recent rally. That is inside of the bullish perspective. The correction comes to 1.27. If 1.27 fails, then you can end up with that lifetime BB chart. Action around the 4.23 itself is fraught with caveats when it comes to actionable trading. You have to always have the assumption that if you're wrong you're going to be betting against a punishing trend and you have to be risk cautious and quick to get out / plan new levels. It always has to be remembered if wrong, the fade will fail spectacularly. Further complicating things is we really can't be sure what sort of 4.23 head fake we're going to get. There are times we reverse right at the 4.23. Or come up a bit shy of it. Other times we make a nominal head fake that you could have started betting against almost as soon as it got passed the level and it went nothing but well for you. Then there are the super blow offs. BB was somewhere in the range of 20 - 25% blow off. I remember this well (I'd shorted the 4.23 touch) it only lasted an exceptionally brief amount of time and was ultimately the Mother of all wicks but if I'd be fully exposed to all that price move - wouldn't have mattered. I'd probably have got nailed before it. When it comes to the actual tactical betting on a 4.23 reversal, it's tricky. The core underlying theory of the 4.23 decision is a simple binary one though. Usually when the 4.23 is hit we're going to head into hyper trend conditions. These can be higher (and this is hard to quantify targets for with fibs) or they can be crashes (which we can usually roadmap with the 1.61 - 2.20 - 4.23 thing). Extremely polarizing level here. Either all fib bases bear cases are entirely annulled for the foreseeable future or a drop of about 75% is setting up. The 4.23 pullback/reversal is the far more common outcome. ==== Bonus doom posting:
NASDAQ:MSTRShort
by holeyprofit
17
Turning BTC into Revenue: MicroStrategy's Innovative ApproacMicroStrategy's Wild Ride: Navigating Bitcoin's Volatility with a "Yield" Strategy MicroStrategy (MSTR), the enterprise software company that famously pivoted to a Bitcoin acquisition strategy, has seen its stock price plummet by roughly 16% year-to-date. This downturn mirrors the broader volatility experienced by Bitcoin, which has faced significant headwinds amidst rising interest rates and macroeconomic uncertainty. However, despite the short-term turbulence, a significant portion of stock analysts remain bullish on MicroStrategy's long-term outlook, primarily due to the company's innovative "Bitcoin yield" strategy. MicroStrategy's bold decision to adopt Bitcoin as its primary treasury reserve asset, spearheaded by former CEO Michael Saylor, has inextricably linked its fortunes to the cryptocurrency's performance. When Bitcoin surges, MSTR typically follows suit, and conversely, downturns in the crypto market exert downward pressure on the stock. This direct correlation has made MSTR a high-beta play on Bitcoin, offering investors amplified exposure to the digital asset's price fluctuations, both positive and negative. The recent decline in MSTR's stock price can be attributed to several factors. Firstly, the Federal Reserve's aggressive interest rate hikes to combat inflation have dampened investor appetite for riskier assets, including cryptocurrencies. This has led to a significant sell-off in the crypto market, dragging down Bitcoin's price and, consequently, MSTR's valuation. Secondly, concerns about regulatory scrutiny in the cryptocurrency space have added to the market's unease. Increased regulatory oversight and potential crackdowns on crypto exchanges and projects can create uncertainty and dampen investor confidence. Lastly, general market sentiment towards growth stocks and technology companies has been bearish, further contributing to MSTR's decline. As a company closely associated with the tech sector and the volatile cryptocurrency market, MicroStrategy has been particularly vulnerable to these broader market trends. Despite these challenges, the bullish sentiment from stock analysts stems from MicroStrategy's unique approach to generating "Bitcoin yield." This strategy involves utilizing the company's substantial Bitcoin holdings to secure loans and generate revenue through various financial instruments. One key component of this strategy is the use of Bitcoin-backed loans. MicroStrategy has successfully leveraged its Bitcoin holdings to obtain loans at favorable interest rates, effectively monetizing its digital assets without selling them. This allows the company to generate cash flow while maintaining its long-term Bitcoin position. Furthermore, MicroStrategy is exploring other avenues to generate Bitcoin yield, such as participating in staking and lending platforms. These activities allow the company to earn interest or rewards on its Bitcoin holdings, further enhancing its revenue streams. Analysts argue that this "Bitcoin yield" strategy provides MicroStrategy with a sustainable business model, even during periods of Bitcoin price volatility. By generating revenue from its Bitcoin holdings, the company can mitigate the impact of price fluctuations and maintain its financial stability. Moreover, the company's continued accumulation of Bitcoin, even during price downturns, demonstrates its long-term commitment to the cryptocurrency. This unwavering belief in Bitcoin's future potential is seen by many analysts as a strong signal of confidence. However, the "Bitcoin yield" strategy is not without its risks. The crypto lending market is still relatively nascent and subject to regulatory uncertainties. Counterparty risk and the potential for loan defaults are also factors that could impact MicroStrategy's financial performance. Another element that is important to consider is the level of debt Microstrategy has taken on. The company has funded its Bitcoin purchases through debt offerings, and while the "Bitcoin yield" strategy is designed to cover the interest payments, a prolonged bear market could put pressure on the company's balance sheet. The success of MicroStrategy's strategy hinges on the long-term appreciation of Bitcoin. If Bitcoin's price continues to rise, the company's Bitcoin holdings will increase in value, and its "Bitcoin yield" strategy will become even more profitable. However, if Bitcoin's price stagnates or declines, the company's financial performance could be negatively impacted. In conclusion, MicroStrategy's stock price has experienced significant volatility in line with Bitcoin's performance. While the recent downturn has raised concerns, stock analysts remain optimistic about the company's long-term prospects, citing its innovative "Bitcoin yield" strategy. This strategy, which involves leveraging Bitcoin holdings to generate revenue, provides MicroStrategy with a unique business model that could potentially mitigate the impact of Bitcoin's volatility. However, investors should be aware of the risks associated with this strategy, including regulatory uncertainties, counterparty risk, and the potential for loan defaults. The success of MicroStrategy's strategy ultimately depends on the long-term trajectory of Bitcoin's price. As the cryptocurrency market continues to evolve, MicroStrategy's ability to adapt and navigate these challenges will be crucial to its future success.
NASDAQ:MSTR
by bryandowningqln
MSTR Short TargetsMSTR is finally beginning to fall now, about 45% off the ATH from only one month ago. We had a good example of what buyer exhaustion looks like with the dramatic reversal and volume spike at ATH. It has been rolling over ever since but finally broke $371 and accelerated. Now I'm watching the gap fill just below $280 for a target. Next would be all the way back to previous ATH at $200, which is still a 30% drop away from here so not saying it hits immediately. That would put it back to the start of the cup and handle breakout as well so that area has the most interest for me in the longer term.
NASDAQ:MSTRShort
by AdvancedPlays
3
Microstrategy Enters "The Valley of Risk"A term I have coined, "The Valley of Risk", describes a price chart which has had a prior very strong bullish trend, pulls back to its 50% Retracement Support, and then fails to hold it... entering a long, grinding, bearish deflation which coincides with the heavy negative emotion being felt by those still holding the bag. Inside the "Valley of Risk" nothing one does is correct: If you sell... it will bottom and rally If you buy... it will continue down If you baghold... it will continue to go down until you cannot stand it and #1 This is just a pattern of human emotion being reflected on a price chart... which is what price charts ultimately are. It is best to avoid going into the Valley of Risk and have strict rules against bagholding. Deploy your capital elsewhere that there is a better potential rate of return. When I teach about this concept I always look back to Zillow NASDAQ:Z . This was a stock I bought "on a dip" at 111 and made the right decision to sell my position at a loss at 102 when the stock price violated the 50% Support. This allowed me to avoid the horrible Earnings miss gap and the final -74% depreciation. My position still would not have recovered as of writing. As I published months ago, it became clear to me that the over exuberance and fancy financial buzz words being thrown around about NASDAQ:MSTR were signs of a ponzi about to collapse. Well, the "Bitcoin nuclear reactor" has cooled and the leverage baked into Microstrategy would be its downfall. That has now come to pass. There are some other interesting elements of price action which have been textbook in this decline that I want to talk about in this post. The 50% Retracement: The operative level for the last 3 months has been 328. This is the 50% Retracement of the YOLO rally. In the pullback from the ATH 440 became the 50% Retracement Resistance. The Ichimoku Cloud Breakout Confirmed: The other textbook setup was when the Ichimoku Cloud Breakout was confirmed by the Lagging Span entering clear bearish space after price had exited the cloud. Interestingly, this happened at the same exact day as Bitcoin; last Friday. You can read more about this strategy and my 14 year study of how effective it is in my recent Ideas: So what now? That is the eternal question of "The Valley of Risk". There is never a good answer because the technical supports have been broken. Personally though I need to answer this question for my bearish positions. The most logical point to look would be the Volume Profile POC at 165. However, Microstrategy is going to move concurrent to Bitcoin itself and knowing the past bearish cycle patterns this week, through brutal, will find a bottom. I do not believe it will be the final bottom only that price may hesitate at some point for perhaps even a month. My trade management This week I will be selling premium against my long Puts, which go out to 2027, to offset my Theta while still remaining short Delta.
NASDAQ:MSTRShort
by norok