MicroStrategy Analysis: MSTR sinks more than 15% at the start of the week

• MicroStrategy lost more than 15% on Monday.
• This considerable decline occurs after three weeks of increases.
• Michael Saylor, CEO of MicroStrategy, on the market for another $575 million.
• MSTR is up 138% in 2024.

The actions of MicroStrategy (MSTR) fell 15.7% on Monday. The pullback came alongside the continued decline over the weekend in the price of Bitcoin, which lost up to 2% over the session to trade near $67,000.

Since stocks tied to the price of Bitcoin, such as MicroStrategy, do not trade over the weekend, they may experience significant volatility on Monday after catching up with Bitcoin's momentum from the weekend.

MSTR stock moved in contrast to the broader market, closing at $1,502.76, as the S&P 500 rose about 0.6% and the Nasdaq posted a gain of about 0.8%.

MicroStrategy Stock News

MicroStrategy stock is still up 138% so far this year, so this pullback needs to be considered in a broader context. Over the previous three weeks, MSTR stock posted gains of 57%, 32%, and 25% respectively.

This means it was time for a retreat. Still, many investors took the opportunity to bet on MSTR on social media. Some mentioned that CEO Michael Saylor has been selling MSTR shares, albeit related to stock options. This back-and-forth dispute in turn led supporters to pile on.

However, Bitcoin supporters still have reason for optimism. The market is just 30 days away from the halving event where miners receive a 50% reduced reward for mining a new block of BTC. In the past, this has caused BTC prices to rise sharply in the 18 months following the halving, as it means miners are selling a drastically reduced amount of Bitcoin on average.

Last Wednesday, Saylor and company announced that they would sell another $500 million in convertible bonds in a private offering to finance new Bitcoin purchases. The notes mature in 2031 and allow buyers to purchase another $75 million if they wish. The software company already owns about 205,000 BTC coins.

This announcement comes after MicroStrategy previously announced that it had purchased 12,000 Bitcoins following a successful sale of $781 million of convertible bonds.

Forecast on MicroStrategy

Once again, a decline in MSTR stock at this juncture should not worry shareholders unduly. Rather, these shakes are common when a stock is heavily traded in the options markets.

A good sign is that MicroStrategy stopped its intraday lows near $1,440. This time, the daily low was also above the March 12 low of $1,438. This gives this level a certain importance. If MSTR bounces here today, the rally will get going again.

However, a break of $1,440 will cause a portion of traders to retreat this week. In that case, expect the MSTR to decline towards the $1,200 level. This price coincides with the 20-day SMA as well as considerable price action from earlier this month.

MSTR Daily Chart