This is daily analysis from CoinDesk analyst and certified market technician Omkar Godbole.
Strategy Bears (MSTR) Breached Key Bull Market Support, Leaving Bitcoin the bears trail behind.
The technical breakdown focuses on Strategy’s stock price’s recent breakout from its 50-week simple moving average (SMA). This SMA has consistently served as a springboard since March 2023, marking the end of corrective pullbacks and triggering buying interest that has propelled stocks to new highs for over two years.
But, in recent weeks, bears have managed to gain a foothold below this crucial average, signaling a significant weakening in buying pressure and putting the stock at risk of further decline.
On the other hand, Bitcoin bears have not yet achieved this goal. BTC’s 50-week SMA has served as a reliable stepping stone over the past two years, with prices still holding above this level despite a pullback from all-time highs above $124,000.
Essentially, BTC’s broader bullish trajectory remains intact.
Nonetheless, Strategy’s recent technical deterioration is worth paying attention to, as it is the largest publicly traded BTC holder in the world, with a coin supply of 640,250 BTC ($71.73 billion), according to Bitcointreasuries.net.
Its sustained accumulation of BTC has been a key driver of the rise from $30,000 to $124,000 over the past two and a half years, making the current price weakness a potential warning sign for BTC bulls.
Strategy and Bitcoin simultaneously surpassed their respective 50-week SMAs in Q1 2023, embarking on impressive rallies, with the moving average serving as a reliable floor (marked by boxes) during corrections.
The bottom has now given way to bearish strategies, with popular momentum indicators like the weekly MACD histogram flashing red. Bitcoin’s MACD is also in the red; It remains to be seen whether its price will follow suit and move below the 50-week SMA.
At the time of writing, BTC changed hands near $111,700, with SMA support at $101,872, per data source TradingView.
Read: Bitcoin Could Hit $100,000 As Friday’s BTC Crash Reinforced 2017-2021 Trendline Resistance
