MicroStrategy”s stock experienced a significant decline of over 7.3% on Tuesday after the company disclosed its most recent Bitcoin acquisition. The stock, now trading at $161, is precariously positioned just above a crucial support level of $149.75, marking its lowest point this year. This decline reflects a staggering drop of more than 70% from its all-time peak.
CEO Michael Saylor revealed that the firm acquired 22,305 Bitcoins (BTC) last week, spending approximately $2.13 billion on this investment, which was funded through the sale of common shares. With this latest purchase, MicroStrategy”s total holdings have reached 709,715 coins, valued at over $64 billion. The management has indicated that they plan to continue accumulating Bitcoin.
The recent downturn in MicroStrategy”s stock price is primarily attributed to the ongoing decline in Bitcoin prices, which have fallen below the critical support level of $90,000 for the first time in several weeks. This price drop has been linked to geopolitical tensions, including threats from former President Donald Trump regarding potential tariffs on European goods. Although European officials are striving to mitigate these tensions, they have warned of possible retaliation, potentially invoking the anti-coercion instrument.
In addition, Bitcoin“s value has been affected by developments in Japan, where government bond yields have surged to unprecedented levels. There are indications that the Bank of Japan may persist with interest rate hikes to address inflation and stabilize the falling yen. These factors contributed to a broader decline in the US stock market, with the Dow Jones Industrial Average plummeting by over 550 points and the Nasdaq 100 dropping more than 320 points.
MicroStrategy”s stock has also suffered as its premium continues to decline. Recent data indicates that the market capitalization-based net asset value has decreased to 0.721, while the enterprise value-based net asset value has fallen to 0.95.
A technical analysis of the stock”s daily timeframe reveals a significant pullback over the past few months, with the price sliding from a high of $456 in July to its current level. The stock remains below all moving averages, and the Supertrend indicator is currently in the red. Additionally, a bearish flag pattern has formed, which is typically viewed as a continuation signal in technical analysis. A drop below the key support level at $149 would further confirm this bearish outlook, potentially pushing the price down to the support level at $100.
