Can the MSTR Stock Price Rebound to $200 as a Top Analyst Predicts?

Key Insights

• MSTR stock price has remained in a narrow range in the past few weeks.
• The stock will rebound as the BTC price has formed an inverted head-and-shoulders pattern.
• MicroStrategy stock will benefit from the ongoing rising short interest.

Like Bitcoin, the MSTR stock price has been stuck in a narrow range since early February this year. Strategy ended the week at $135, a few points above the year-to-date low of $105. Still, some key catalysts suggest that the stock may be on the verge of a strong bullish breakout in the near term.

MSTR Stock to Benefit From Bitcoin’s Resilience

One major catalyst for MSTR’s stock price is Bitcoin’s resilience over the past few weeks. Bitcoin was trading at $70,800 on Saturday, March 21, up by over 20% from the year-to-date low. Spot Bitcoin ETFs have also added over $1.5 billion in assets this month after suffering substantial outflows in the previous four months.

In contrast, gold price dropped to $4,495, down by nearly 20% from the year-to-date high. Silver dropped to $67 from the record high of $122.

The same is happening in the stock market, where the blue-chip Dow Jones Industrial Average (DJIA) ended the week at $45,640 from over $50,000 in February. The S&P 500 and Nasdaq 100 indices have also dropped in the past two months.

Therefore, there is a likelihood that investors are viewing Bitcoin as a safe-haven asset, which explains why most are buying it amid the ongoing Iran war.

At the same time, President Donald Trump has signaled that he wants to wind down the ongoing war, a move that will lead to a rotation to risk assets. It would also lead to lower crude oil prices, removing the lingering inflation risk.

Bitcoin Price Has Formed an Inverted Head-and-Shoulders Pattern

Meanwhile, technical analysis suggests that the BTC price may be preparing a big rebound after forming an inverted head-and-shoulders pattern on the 12-hour chart.

This pattern is made up of three key parts: a head ($60,000), two shoulders ($65,200), and a neckline at $74,200. In most cases, this pattern often leads to a strong bullish breakout.

If this happens, Bitcoin price may surge to $80,000 and above, including potentially to the key resistance level at $100,000. Such a move would benefit MicroStrategy, a company that holds 761,068 Bitcoins, currently valued at $53.8 billion.

MicroStrategy Stock High Short Interest May Lead to a Squeeze

The MSTR stock price may also benefit from the rising short interest. Data shows that the short interest has jumped to nearly 13%, a sign that more investors are betting against the company.

In theory, rising short interest is usually a bearish sign because it leads to more selling pressure. However, in reality, it may also experience a short squeeze in the coming weeks.

A short squeeze occurs when a highly shorted stock suddenly rallies, leading to greater losses for investors. A good example of this is what happened in 2021 when highly shorted companies like Bed Bath & Beyond, GameStop, and AMC surged, leading to huge losses.

MSTR Share Price Technical Analysis

The daily chart shows that MSTR stock has traded sideways this month. It remains slightly higher than the year-to-date low of $105.85.

On the positive side, the stock is showing signs of forming a bullish divergence pattern, a common bullish reversal sign. The Percentage Price Oscillator (PPO) has been rising and is about to cross the zero line.

Similarly, the Relative Strength Index (RSI) has jumped from the oversold level of 24 in February to the current 50.

Therefore, the MicroStrategy stock will likely stage a strong comeback, potentially to the important resistance level at $190, its highest level in January this year. The bullish outlook will become invalid if it drops below the year-to-date low of $105.

The post Can the MSTR Stock Price Rebound to $200 as a Top Analyst Predicts? appeared first on The Market Periodical.