This is a daily analysis from CoinDesk Analyst and Chartered Market Technician Omkar Godbole.
Strategies (MSTR) bears break out of major bull market support and exit Bitcoin BTC$111,506.46 The bear follows.
The technical breakdown centers around Strategy's stock price's recent breakout of its 50-week simple moving average (SMA). This SMA has consistently served as a springboard since March 2023, marking the end of a correctional pullback, sparking buying interest, and pushing stocks to new highs in more than two years.
However, in recent weeks, the bears have been able to establish a foothold below this important average, suggesting a significant waning in buying pressure and exposing the stock to further downside.
In contrast, Bitcoin bears have yet to achieve this. BTC's unique 50-week SMA has served as a reliable starting point for the past two years, and despite pulling back from all-time highs above $124,000, the price remains above that level.
Essentially, BTC's broader bullish trajectory remains intact.
Nevertheless, Strategy's recent technical deterioration is noteworthy as it is the world's largest publicly traded BTC holder with 640,250 BTC ($71.73 billion) of coins stash, according to Bitcointreasuries.net.
Its sustained BTC accumulation has been the main driver of its rise from $30,000 to $124,000 over the past two and a half years, making the current price weakness a potential warning signal for BTC bulls.
MSTR and BTC weekly chart and MACD histogram. (CoinDesk/TradingView)
Both Strategy and Bitcoin simultaneously broke out of their respective 50-week SMAs in the first quarter of 2023, embarking on an impressive rally with the moving average acting as a reliable floor (marked by a box) during the correction.
Now, the floor has given way to the strategy bears and popular momentum indicators like the weekly MACD histogram are flashing red. Bitcoin's MACD is also in the red. It remains to be seen whether the price follows suit and moves below the 50-week SMA.
At the time of writing, BTC was trading near $111,700 with SMA support at $101,872, per data source TradingView.
read: Friday's BTC crash strengthens resistance on the 2017-21 trend line, potentially sending Bitcoin plummeting to $100,000
