Shares of MicroStrategy (Nasdaq: MSTR), widely known for its aggressive Bitcoin investment strategy, have officially entered a technical correction phase after falling 14% from their monthly high. The stock declined to \$370, significantly below the \$430 peak it reached earlier in May, as Bitcoin and other cryptocurrencies experienced broader market pullbacks.
While Bitcoin has slipped just 5% from its 2024 high, MSTR has underperformed highlighting the stock’s amplified volatility and direct correlation with Bitcoin price action. The decline has dragged MSTR to its lowest level since April 30, despite the company’s continued Bitcoin accumulation.
Massive Bitcoin Holdings and Continued Accumulation
MicroStrategy remains the world’s largest publicly traded corporate holder of Bitcoin, with over 580,250 BTC on its balance sheet. Last week alone, the firm added more than 4,000 new coins to its treasury, pushing the total value of its holdings to approximately \$61 billion at current prices.
Even amid short-term market weakness, MicroStrategy appears undeterred. The company is reportedly preparing to raise \$84 billion, mainly through convertible bonds, to fund further Bitcoin purchases. Executive Chairman Michael Saylor has repeatedly affirmed the company’s commitment to a long-term hold strategy.
Analysts Expect a Rebound
Despite the current dip, two major factors support a potential recovery in MSTR’s stock price:
- Bullish Long-Term Bitcoin Outlook
Top analysts and institutions maintain extremely bullish projections for Bitcoin’s future.
- Adam Back, cited in Bitcoin’s original whitepaper, predicts a surge to \$1 million within five years.
- BlackRock has suggested Bitcoin could climb to \$700,000, while Cathie Wood’s Ark Invest estimates a possible target of \$2.4 million by 2030.
- Saylor, a vocal Bitcoin advocate, views the asset as a \$100 trillion opportunity, citing its consistent long-term growth.
- Technical Indicators Signal Recovery
From a technical perspective, MSTR stock continues to display strength:
- A double-bottom pattern between March and April formed a bullish base at \$236.10.
- A breakout above the neckline at \$341.55 occurred on April 23.
- MSTR is now performing a break-and-retest of this neckline a classic bullish continuation pattern.
- It remains above the 50-day and 100-day Exponential Moving Averages, indicating that the uptrend remains intact.
If Bitcoin’s current cup-and-handle pattern plays out, analysts believe the coin could reach \$145,000 in the coming months. At that level, MicroStrategy’s Bitcoin holdings would be valued at approximately \$84 billion, further justifying investor optimism.
What’s Next for MSTR?
The short-term outlook suggests that MSTR could dip slightly further to \$341 to complete its retest. However, if the bullish technical setup holds and Bitcoin resumes its upward trajectory, MSTR could rebound to its monthly high of \$428 and possibly retest its all-time high of \$542.
While MicroStrategy’s stock has pulled back sharply, the company’s core thesis on Bitcoin remains intact. With deep BTC exposure, strong technical signals, and a bullish long-term crypto outlook, MSTR could be poised for a strong rebound. However, as with all crypto-linked equities, investors should remain mindful of heightened volatility and macro risks.
