MicroStrategy, which stands out with its cryptocurrency investments, continued its aggressive purchases in this field by purchasing 592 Bitcoins on February 23. Thus, the company increased its total Bitcoin assets to 717,722. Despite this development, the company’s stock price could not recover at the desired level and lost value again after the jumps experienced over the weekend.
Latest Bitcoin Purchase Couldn’t Stop the Fall in Stock
MicroStrategy’s spending approximately $40 million on new Bitcoin purchases and adding 592 more Bitcoins to its portfolio at an average price of $67,286 is seen as a step parallel to the company’s long-term strategy. However, immediately after this large purchase, the share value decreased again. After a loss of more than 9 percent on February 24, there was a 16 percent increase on February 25, but the share price remains approximately 4 percent lower than its weekly peak.
Position of Institutions: Direction of Money Uncertain
Technical indicators accompanying price movements indicate that there is significant uncertainty in the market. The Chaikin Money Flow (CMF) indicator, which is used especially to follow the behavior of large investors, started its horizontal course around zero immediately after MicroStrategy’s new Bitcoin purchase. Although there were short-term institutional accumulation signals during the recent fluctuations, CMF’s current stable course reveals that large investors do not take a clear buy or sell position against the stock.
Between January 12 and February 23, the rise of the CMF indicator and the decline in the price were interpreted as institutional investors quietly accumulating. However, in the last case, the indicator line remains close to zero, reflecting indecision on the market side. It is stated that the changes that will occur in CMF in the following days may determine a new direction in the share price.
The Downtrend Is Getting Stronger
On the technical analysis side, the relative strength index (RSI) showed a negative divergence before the recent price drop. While lower peaks have been seen in MicroStrategy stock in recent months, the RSI has pointed to upper peaks on the chart. This type of divergence is often heralded as a sign of a strong correction, and similar situations have resulted in sharp declines in the past.
Another negative mismatch that occurred in mid-January caused a decrease of approximately 45 percent in the value of the stock, and the last mismatch completed on February 20 brought about a loss of nearly 13 percent. Due to the current weak outlook, technical analysis suggests that a new downward movement in the share price may come to the fore.
On the other hand, the share price has broken down the “bear flag” pattern, which is currently a major bearish pattern. Such formations are known in technical analysis to often herald a deeper price correction.
The closest support level in the company’s share price stands out as $ 119. If this level is broken, new support points are at $106 and $85. According to the Fibonacci retracement levels, the $ 70 band has become a technically strong target.
