As the odds of Bitcoin hitting an all-time high increase, Strategy stock may also demonstrate positive dynamics. This article reviews the technical analysis of the stock and current fundamental factors affecting the Bitcoin market.
Technical Analysis of Strategy Stock
MSTR shares traded at $377 on Wednesday, slightly above this week's low of $360. They have jumped nearly 70% from their lowest point this year. Technical analysis indicates that shares have been in a tight range since May and remain above both 100-day and 50-day exponential moving averages, providing substantial support.
Strategy has formed a bullish pennant pattern, which often leads to additional gains. This pattern consists of a vertical line and a symmetrical triangle, with a breakout occurring when the two lines converge. The profit target for a bullish pennant is established by measuring the length of the flagpole, which in this case is $200—$420 minus $230.
The breakout point is at $385, bringing the target price to $585, up 52% from the current level. A drop below the support at $342 will invalidate the bullish forecast.
Odds of Bitcoin Hitting All-Time High
The main catalyst for the growth of Strategy stock is the rising odds of Bitcoin hitting an all-time high before October, which has increased to 81% on Polymarket. Such a move would be favorable for Strategy, as the company holds 592,345 Bitcoins currently valued at over $63 billion.
Fundamental Factors Supporting Bitcoin
Bitcoin exhibits strong bullish fundamentals and technicals. For example, Bitcoin supply on exchanges has crashed to the lowest level in years. Demand for Bitcoin ETFs has surged, with inflows occurring for eleven consecutive days, totaling $47.9 billion since January last year. Technically, Bitcoin price has formed a cup-and-handle pattern, which is a popular continuation setup, suggesting the price could rise above $140,000 in the near term.
In summary, based on the analysis, Strategy stock may continue to rise due to positive developments in the Bitcoin market. If predictions hold true, this could create the potential for significant price increases.
