Key Takeaways:
- MicroStrategy announced adding another 2,500 Bitcoin tokens to its purse.
- However, MSTR price failed to react positively to the news.
NEW DELHI (CoinChapter.com) — Michael Saylor-owned MicroStrategy announced that it bought nearly 2,500 BTC to its bulging Bitcoin (BTC) stockpile.
In an SEC filing, the tech firm disclosed it added approximately 2,395 BTC for about $42.8 million “in cash” between Nov 1 and Dec 21. In addition, the firm purchased through its wholly-owned subsidiary MacroStrategy LLC at an average of $17,871 per Bitcoin token.
On Dec 22, Microstrategy sold nearly 704 BTC tokens for almost $11.8 million at an average price of $16,776. The firm justified the sale by stating that the loss would offset previous capital gains and might generate a tax benefit.
Additionally, the company added nearly 810 BTC tokens at an average price of $16,845, totaling nearly $13.6 million, on Dec 24. Per the transactions, Microstrategy stated that the firm had increased its Bitcoin holdings from approximately 130,000 bitcoins on Oct 31 to nearly 132,500 bitcoins on Dec 27.
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Additionally, the business intelligence firm shared that it acquired its 132,500 BTC tokens for $4.03 billion at an average price of nearly $30,397. Interestingly, the 810 BTC sale marks the first time Microstrategy has sold Bitcoins since 2020.
MSTR Price Forms Bearish Pattern
Meanwhile, the MSTR price formed a bearish pattern called the descending triangle.
A descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern. The height of the triangle’s thickest section determines the price target in a descending triangle setup.
Per the rules of technical analysis, the descending triangle pattern has a price target of $40.7. As a result, if MSTR confirms the pattern, Microstrategy risks a drop of 72.4% from current levels. MSTR last traded at around $40 in 2009.
MSTR Price Facing Strong Bearish Pressure
2022 has not been kind to Michael Saylor’s firm, with MSTR share prices losing nearly three-quarters of their value since Jan 1 (-73.17% YTD).
Microstrategy continued its nosedive as its stock price painted its 12th consecutive red daily candle on Dec 28. MSTR price dropped 9.18% on Dec 27 before shedding 6.3% on Dec 28 to form a low near $141.5, a price level the firm last saw in Sept 2020.
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Additionally, the downward-sloping EMA trendlines highlight the market’s strong bearish sentiment for MSTR. Bears seem to be aggressively defending EMA levels with the 20-day EMA (red wave) trendline rebuffing MSTR’s efforts to break above it.
If bears continue to offload MSTR shares, Microstrategy risks dropping to test support near $137. Moreover, a continued sell-off might result in the firm’s stocks plunging 12.5% and reaching support near $125 before recovering.
The relative strength index has entered the oversold region, with a value of 27.98 on the daily charts. Oversold RSI levels often hint at an upcoming bullish trend reversal, prompting buyers to enter the market.
Once bulls enter the market, MSTR might start a recovery rally to challenge resistance near $154. Moreover, a break and hold above immediate resistance might confirm the uptrend, attracting traders and propping MSTR for another jump that could take the stock’s price to $169 before correcting.
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