Market analyst Jamie Trendsetter has recently forecasted a significant movement for the shares of Strategy (MSTR), predicting an imminent decline prior to a possible rebound. He estimates that the stock might drop to around $350 before making a recovery to potentially $700. This volatile two-step forecast has traders keeping a close eye on upcoming trends.
Indicators of Potential Decline
According to Trendsetter, the stock has fallen below both its 10-day EMA and its 30-day SMA, a signal that suggests a bearish trend may be underway. This crossover often signifies that short-term buying pressure is weakening. The previous bullish phases seen earlier in the year have apparently given way to increased selling pressure, introducing a cautious sentiment among investors.
Analyzing the current price action on $MSTR.
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Volume Analysis Could Signal Bottom
Trendsetter is on the lookout for a surge in volume coinciding with a potential drop to $350. A sustained increase in sell volume during down days would indicate that sellers dominate the market. However, a subsequent decline in selling volume coupled with higher buying volume could suggest that the downtrend is nearing its end. Trendsetter emphasizes he will adopt a bullish perspective only when buying activity clearly surpasses selling pressure.
Capital Raising and Bitcoin Strategy
Strategy intends to secure $2.1 billion via a new stock offering. This capital is earmarked for further investments in Bitcoin. While an increase in Bitcoin holdings could bolster the stock’s value in the long term, the dilution potentially caused by new shares entering the market may exert downward pressure on MSTR in the interim. Trendsetter believes this dilution might partly explain the expected initial downturn.
Historical Patterns Indicate Potential Recovery
Trendsetter reminds traders of a previous breakout that resulted in an impressive gain of over 100% with minimal pullbacks. Based on similar historical patterns, he predicts that once the stock hits its next low, a rebound is likely. His philosophy is that while history may not repeat itself, it tends to echo previous trends.
Additional Insights from Experts
Crypto expert Sarah Quant has also weighed in, noting a TD Sequential sell signal on MSTR’s weekly chart, which typically indicates an impending drop. Furthermore, the company’s recent acquisition of a substantial Bitcoin amount—7,390 BTC for approximately $765 million—drove the stock above $400 earlier this week, yet failed to suppress bearish chart signals.
In summary, Trendsetter anticipates a brief dip towards $350 before a more substantial recovery. His analysis draws on moving averages, shifts in volume, previous breakouts, and the implications of Bitcoin’s influence on the stock.
Source: Market Insights, chart data from AnalyticsPro
