Since prices peaked at $450 in July this year, Strategy’s shares have collapsed by a whopping 55 percent. Last week, the Bitcoin-focussed company even slipped beneath the key psychological $200 support.
Coinciding with Strategy’s persistent decline was the rumour that the firm is starting to dump its 641,692 Bitcoin hoard – a BTC holding worth around around $60 billion (assuming $95K per coin). All these bearish attacks had forced the Strategy chairman to come out and deny the market rumours.
“We are buying,” announced Michael Saylor last Friday, “we’ll report our next buys on Monday morning.”
Wild volatility on crypto stocks should not surprise investors. After all, volatility is what drive the digital asset sector.
Still, Strategy’s spectacular price collapse since the summer is shocking. Strategy is the world’s largest bitcoin treasury company. A deep drawdown like this may cause investors to doubt its strategy and to suspect the onset of another ‘crypto winter’.
But, is Strategy’s stock decline exaggerated? Bitcoin is holding above $95K at the time of writing, while Nasdaq 100 is still trading less than 5 percent below its all-time highs.
Technically oversold, Strategy may easily rally 15-20 percent (or more) from current levels to work off these negative sentiment. The nearest overhead resistance is noted at $240.
In sum, while MSTR’s chart deterioration is glaring, the risk-reward for new sells are unfavourable due to the potential of a counter-trend rally.
