Shares of MicroStrategy Inc. (MSTR) rose by 10.37% to $146.44 on March 05, 2024, during the trading session, raising its market capitalization to around $40.66 billion. MicroStrategy Inc.’s shares, traded on NASDAQ, have again come into focus as investors are keeping a close eye on a critical resistance level around $160.
Market participants frequently track MicroStrategy because of its high correlation with the Bitcoin market. MicroStrategy Inc., under the leadership of its chairman Michael Saylor, has a huge reserve of Bitcoin on its balance sheet, and therefore, its stocks tend to react to any change in the sentiment of the cryptocurrency market.
MSTR Approaches Key $160 Resistance Level
According to a recent post by a crypto analyst on CryptoPulse, MicroStrategy is trading in a descending broadening wedge formation on its daily chart, and the key level to watch is near $160, where the upper resistance level is located in the wedge formation.
If the stock fails to rise above this resistance level, it may again face rejection and may fall back to the $130 price level or lower.
On the other hand, if the buying pressure pushes the price above the $160 resistance level and closes with strength, it may indicate a change in trend and may lead to a rise in prices towards the $200 price level.
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MicroStrategy Stabilizes Near Critical Yearly Support
Beyond the short-term pattern, MicroStrategy’s price is also sitting inside a major higher-timeframe demand zone, indicating that the stock may be forming a base at this level.
The price level has been gradually moving down to reach the yearly support level, which has been the starting point for a major upward movement in prices.
Looking at the long-term technical analysis of the stock price, it has been observed that it has been trading in one of the discount zones in its macro trading range. Also, it has been trading in one of the lower price regions in its trading range, and all other regions are still untested.
Another technical level that may be important in defining the price movement in MicroStrategy has been observed to be above the current price level in terms of a monthly fair value gap.
It has been observed that this gap was created in the previous price decline due to the rapid fall in prices in the stock market, which could eventually pull the price toward the midpoint of this monthly range if the current demand zone holds.
The role of institutional participation in the stock’s outlook has not diminished. The investment firms such as Capital International Investors, Vanguard, Amundi, Bank of America, Capital Research, and Morgan Stanley remain among the institutions that hold shares in the company.
If Bitcoin were to dip sharply, it may have a negative effect on the stock price and cause it to be delayed in its breakout.
As it currently trades close to a key demand zone with resistance at $160, it may be important in the coming days to see if MicroStrategy can continue to rise to $200 or if it falls back to lower support levels.
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