MSTR stock price remained under pressure on Monday after Michael Saylor’s Strategy continued its Bitcoin accumulation.
Summary
- MSTR stock price has been in a strong downward trajectory this month.
- Strategy continued with its Bitcoin buying spree last week, scooping 390 coins.
- Technical analysis points to more downside after it formed a death cross pattern.
Strategy stock was trading at $294, down by 36% from its highest point this year and 46% below its all-time high of $542. This crash has brought its market capitalization from $128 billion to $83 billion.
Strategy’s NAV premium has plunged
The MSTR stock price has plunged in the past few months as interest in Bitcoin (BTC) treasury companies waned.
A closer look at most of these firms shows that their stocks have plunged by double digits, with Metaplanet moving from ¥1,927 in June to ¥488 today.
Other similar companies, like American Bitcoin, Semler Scientific, MicroCloud Hologram, and KindlyMD, have plunged in the past few months.
Strategy stock continued falling as the company bought more coins. In a statement, the company said that it acquired 390 coins worth over $43 million last week, bringing its holdings to $640,808.
The ongoing MSTR stock crash has also led to a sharp decline in its Net Asset Value or NAV. Data compiled by BitcoinTreasuries show that the basic mNAV multiple has plunged to 1.153, down from the November high of 3.3.
Similarly, the mNAV based on its enterprise value has dropped to 1.35. These numbers means that the premium the company had a few months ago has now disappeared. It may drop below 1 as Metaplanet has done if the stock remains under this pressure.
The ongoing NAV crash is a sign that MSTR stock has become a bargain, which is a good thing for investors. However, the risk is that the company will likely focus on at-the-market (ATM) offerings to raise capital for Bitcoin purchases.
This means that investors will continue being diluted as it raises money to buy Bitcoin. Data shows that its outstanding shares have jumped to 261 million from 76 million in 2021.
MSTR stock death cross points to more downside
The daily timeframe chart shows that the MSTR stock price has been under pressure in the past few months, moving from a high of $457 in July to $295 today.
It has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages have made a bearish crossover pattern. This pattern often leads to more downside over time.
The stock remains below the Supetrend indicator, while the True Strength Index has remained in a strong downward trajectory. Also, the Relative Strength Index has remained below the neutral point at 50.
Therefore, while the Strategy stock is a bargain compared to its historical levels, there is a risk that it will continue falling, potentially to the key support level at $233, its lowest level in March this year.
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