MicroStrategy Stock Soars: Key Levels to Watch After Latest Bitcoin Buy

Ladies and gentlemen, buckle up! MicroStrategy (MSTR) is on a tear, and you need to pay attention. The software giant just added another 6,911 bitcoins to its already massive stash, pushing its total holdings over the 500,000 BTC mark. This move sent the stock soaring more than 10% on Monday, and it's showing no signs of slowing down. So, let's dive into the key levels you need to watch as this crypto play continues to make waves.



First things first, let's talk about the technicals. MicroStrategy's stock has been on a rollercoaster ride, but it's found support at the 200-day moving average. Now, it's closed above the 50-day MA, which is a bullish signal if there ever was one. The relative strength index (RSI) is above 50, indicating strong momentum, but it's not overbought yet. This means there's still room for the stock to run higher.

Now, let's talk about the key levels you need to watch. The first overhead area to eye is around $383. This level has seen a lot of action between mid-November and late January, and a break above it could set the stage for a rally to the $543 area. That's right near the all-time high (ATH) set in November last year. But don't stop there! Using the bars pattern tool, we can project an overhead target above the ATH, around $870. That's right, $870! If the stock can break through these levels, it could be a new trend higher until late May.

But what about support levels? During pullbacks, keep an eye on $232. This level has seen support near the early-November profit-taking low and recent troughs in February and March. And if the stock really takes a dive, $180 is a more significant support level. That's near a horizontal line that links multiple prominent peaks on the chart between March and July last year.



Now, let's talk about the risks. Bitcoin is volatile, and its price can fluctuate significantly in a short period. For example, the all-time high price of Bitcoin was $109,026.02, which is 21.67% higher than its current price. This volatility can lead to significant losses for MicroStrategy if the price of Bitcoin were to decrease. Additionally, the company's heavy investment in Bitcoin has led to a negative return on equity (ROE) of -11.44% and a negative return on invested capital (ROIC) of -7.74%. This indicates that the company's investment in Bitcoin has not been profitable in the short term.

But let's not forget the rewards. MicroStrategy's accumulation of Bitcoin has positioned it as the world's largest corporate holder of the cryptocurrency. This strategy has allowed the company to benefit from the appreciation in the value of Bitcoin, which has seen a price increase of 0.30% in the last hour, 1.64% in the past 24 hours, and 3.96% in the past week. The current price of Bitcoin is $85,403.82 per BTC, with a 24-hour trading volume of $12.32B. This appreciation in the value of Bitcoin has contributed to the increase in MicroStrategy's market valuation, which is currently at $87.44 billion.

So, what's the bottom line? MicroStrategy's recent Bitcoin purchase has had a positive impact on its stock price and overall market valuation. But the potential risks associated with this investment strategy, such as the volatility of Bitcoin's price and the company's negative ROE and ROIC, should be carefully considered. Stay tuned, folks, because this story is far from over!