Serious Risk For Microstrategy & Bitcoin (MSTR + BTC)

This is a short post. Over the last few months, I've written and spoken about why Michael Saylor's entrance into Bitcoin has contributed to my skepticism about the valuation of the market, since the MSTR chart eerily echoes the bubbly behavior from the dotcom boom. As leverage and profit come out of the market, I think MSTR will be severely impacted. Saylor himself has said that holding MSTR is the closest you can get to holding a Bitcoin spot ETF. I think this is all going to backfire, and result in a precipitous drop for both. If MSTR declines back to $160 per share, I expect Bitcoin also to fall at least 50% and break the $20k line.

As shown on the left, Bitcoin can bounce at this trendline to begin the next month and perhaps make an attempt at the $50k level. This is seeming less and less likely, but you never know! I always acknowledge the alternate possibility. We'd need to see a dovish shift from the fed and/or student loan cancellation for that to occur, in my opinion.

Immediate Bearish targets for Bitcoin:
$17.2k
$13.4k
$9.7k

MSTR:
$227
$165
$121


This is not meant as financial advice. This is meant for speculation and entertainment only - this represents my opinion. There are plenty of other opinions out there :)

-Victor Cobra

Comment:

Before any further downside, it's possible Bitcoin will want to test the 9 month EMA as resistance (just above $42k). All depends on traditional markets at this point.

Comment:

Current structure shows a short term bounce off the bottom of this little wedge. Volume is still incredibly low. To test $42k, Bitcoin will need to push above the $39.6 level, and the $40.5 level.

Comment:

The promising thing for bulls here is that sell volume has also dropped off, though sellers were quite strong above $40k.

Comment:

A break BELOW that wedge would be extremely bearish, though there is still room to tap that giant ascending support, which now perfectly intersects with the wedge.

Comment:

Volume has been extremely weak on the bounce, so wouldn't be surprised to see the floor fall out, pending how markets look tomorrow. Right on support here, so price action in either direction should be quite interesting.

Comment:

Well I guess that’s that.