MSTR stock price has stabilized this month, helped by the ongoing Bitcoin recovery, and as investors bought the dip after it crashed by over 65% from its highest point in 2025.
Summary
- MSTR stock has formed a bullish divergence and a double-bottom pattern.
- Technical analysis points to a Bitcoin rebound in the near term.
- Strategy has more gains to go if Bitcoin rebounds.
Strategy, the biggest Bitcoin (BTC) treasury company, was trading at $176 on January 15, up by 18% from its lowest level this year. This article explores the key reasons why the stock may be on the cusp of a big breakout.
MSTR stock technicals points to more gains
The daily timeframe shows that the stock bottomed at $152 earlier this month and then rebounded to the current $176. This rebound happened after forming a double-bottom pattern, a common bullish reversal sign.
The stock has formed a bullish divergence pattern. A closer look shows that the two lines of the Percentage Price Oscillator have moved upwards and are nearing their zero line. The histogram of this pattern have already moved above the zero line.
At the same time, the Relative Strength Index has also continued rising. It has moved from the oversold level of 23 to the current 52.
Therefore, the most likely scenario is that it continues to rise, with bulls targeting the 23.6% Fibonacci Retracement level at $222, which is ~30% above the current level.
The bullish outlook will remain as long as it remains above the double-bottom level at $152. A move below that level will point to more downside, potentially to $100.
Bitcoin price weekly chart points to a rebound
Strategy is the biggest Bitcoin holder, with 687,410 coins currently valued at over $65 billion. Therefore, a strong Bitcoin rebound will draw investors back to Strategy.
The weekly chart shows that the BTC price has been in a long-term bull run since December 2022 when it bottomed at $15,370. It has formed an ascending channel and is now hovering near its lower side.
This chart shows that it has always rebounded whenever it reached that support level. It has also remained above the 100-week Exponential Moving Average.
The coin’s RSI is about to cross the neutral point at 50. Therefore, Bitcoin may soon rebound to the key resistance at $100,000. A move above that level will indicate further gains, potentially to its all-time high of $126,300.
If Bitcoin retested its all-time high, the value of Strategy’s Bitcoin holdings would move from the current $66 billion to over $86 billion.
MSTR has other potential catalysts, including MSCI’s decision not to remove it from its indices. Such a move would have led to forced selling by asset managers.
Additionally, it has become a bargain with a market NAV of 0.96, and its short interest has moved to 10%. Highly shorted companies often go through short squeezes.
