MicroStrategy Extends Losses to 7.86% Amid Strong Bearish Momentum

MicroStrategy (MSTR) concluded the most recent trading session at $304.79, marking a significant decline of 4.84%. This extends a two-day losing streak, culminating in a cumulative drop of 7.86%, reflecting pronounced bearish pressure.
Candlestick Theory
Recent sessions exhibit bearish momentum. The 2025-10-10 candle closed near its low ($304.79 vs. low $303.57) after gapping down, forming a long red candle indicating strong selling pressure. This follows a bearish candle on 2025-10-09 ($320.29 close, well below the high $328.99). A potential support zone emerges around the $300 psychological level and the recent low of $303.57. Resistance is now established near the $320-$323 area, aligning with the previous two sessions' lows and the 2025-10-08 close at $330.80. The long red candle on 2025-10-07 (-8.70%) confirmed a breakdown below previous support near $340-$345.
Moving Average Theory
The price is decisively below all major moving averages, indicating a strong downtrend. Crossing below the 50-day MA (estimated ~$340-$350 based on data) occurred decisively on 2025-10-07. The 100-day MA is likely significantly higher, further confirming the bearish long-term structure. The shorter-term moving averages (e.g., 10-day and 20-day) are now sloping downwards above the price, acting as dynamic resistance. Sustained trading below the 50-day MA and the increasing distance to higher timeframe averages reinforces the bearish bias.
MACD & KDJ Indicators
Both momentum oscillators signal oversold conditions but lack bullish confirmation. The MACD line is likely well below its signal line and deeply entrenched in negative territory, with the histogram showing strong negative momentum. The KDJ indicator, particularly the K and D lines, would likely be below 20, indicating oversold territory. However, the absence of bullish divergence (where price makes lower lows but the oscillator forms higher lows) suggests the downtrend momentum, while potentially stretched, has not yet exhausted itself. A bearish crossover remains dominant.
Bollinger Bands
Price is trading near the lower Bollinger Band (low $303.57 on 10/10), which often denotes oversold conditions. The recent sharp price drops on relatively high volume (10/07, 10/10) suggest Bollinger Band expansion, reflecting increasing volatility on the downside. A close below the lower band could signal an extended oversold move, but also strong downside momentum. A move back inside the bands or towards the middle band would be needed for any stabilization signal. Band contraction preceding the recent breakdown (mid to late Sept) signaled the coiled energy released to the downside.
Volume-Price Relationship
Recent declines have been validated by elevated volume, notably the high volume selling on 2025-10-07 (19.6M shares, -8.70%) and 2025-10-10 (13.06M shares, -4.84%). This surge in volume accompanying significant price drops confirms strong bearish conviction and increases the sustainability of the downtrend in the near term. Lower volume on the small rebound attempts (e.g., 2025-10-08 +0.73%) suggested weak buying interest. Current high downside volume on breaks below key levels undermines support.
Relative Strength Index (RSI)
Calculated RSI (using the standard 14-period lookback on closing prices) is approximately 29.3. This places the indicator firmly in oversold territory (<30). While this often signals a potential exhaustion of selling pressure or an impending bounce, it must be interpreted cautiously within the context of a strong downtrend. Oversold RSI levels in downtrends can persist, and price can continue to decline. RSI divergence (bullish) is currently absent; the RSI has been making lower lows alongside price, reinforcing the bearish trend strength. The oversold reading suggests a bounce is possible but does not guarantee an immediate trend reversal. A break above 30 (and subsequently 50) would be needed to signal diminishing downside momentum.
Fibonacci Retracement
Using the significant peak near $454.33 (2025-07-18) and a major trough near $179.48 (estimated from 2024-10-15 low of $189.7, though earlier swing lows exist), key Fibonacci levels are calculated:
23.6%: ~$252
38.2%: ~$300
50.0%: ~$317
61.8%: ~$334
78.6%: ~$360
Recent price action saw the $334 (61.8%) level fail as support around late September/early October. The current price (~$305) sits near the 38.2% retracement level ($300). This $300 zone, encompassing the 38.2% Fib and the psychological $300 level, represents a crucial potential support area. A decisive break below $300 would open the path towards the 23.6% level near $252. Resistance now converges near $323-330 (previous lows, potential 50% Fib).
Confluence & Divergence
The $300-$305 zone presents significant confluence: it is a major psychological barrier, aligns closely with the 38.2% Fibonacci retracement level, represents the current session's low, and coincides with deeply oversold RSI and KDJ readings. This increases the probability of at least a temporary pause or technical bounce occurring near this level. However, the primary divergence exists between the oversold oscillators (RSI, KDJ) and the unrelenting bearish price action and confirmation from high-volume selling and moving averages. While the oversold readings warn of a potential exhaustion point near $300, the overall technical structure remains decisively bearish. A decisive breach below $300 would invalidate the immediate support confluence and signal a likely continuation of the downtrend towards the next significant Fib level near $250. Sustained trading below $330 strengthens the bearish case.