MSTR stock price has crashed this year and is now hovering at its lowest level since April. Strategy has plunged by over 42% from its highest level this year, and its technicals and fundamentals points to more downside in the near term.

MSTR stock price technicals points to more downside

The daily timeframe chart shows that the Strategy stock price has been in a strong downtrend in the past few months. It has crashed from a high of $455 in June to a low of $255.

This crash happened after the stock formed a double-top pattern at $430 and a neckline at $357, its lowest level on May 29. Worse, it has formed a death cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other.

Strategy stock has plunged below the Supertrend and the Ichimoku cloud indicator. This is a sign that bears remain in control for now.

Meanwhile, the Relative Strength Index (RSI) and the MACD indicators have continued falling, meaning that the sell-off is strengthening.

Therefore, the most likely scenario is where the MSTR stock price continues falling, with the next key support level to watch being the psychological level at $230, the lowest level in April this year.

A move below that support will point to more downside, potentially to the psychological level at $200. On the other hand, a surge above the key resistance level at $300 will invalidate the bearish outlook.

MSTR stock price chart | Source: TradingView

Bitcoin price crash to push Strategy shares lower 

Strategy, which is the biggest Bitcoin Treasury company, has a major headwind that will move its stock lower in the near term: Bitcoin.

The daily timeframe chart shows that the Bitcoin price surged to a high of $126,230 in September and then retreated to a low of $107,700. 

Bitcoin formed a double-top pattern and a neckline at $107,700, where it is trading at. It has also formed a death cross pattern, with the 50-day and 200-day Weighted Moving Averages crossing each other.

Like the MSTR stock, Bitcoin price has moved below the Supertrend indicator, while the Relative Strength Index and the Percentage Price Oscillator (PPO) have all continued moving downwards this year.

BTC price chart | Source: TradingView

Therefore, there is a likelihood that the Bitcoin price will continue falling in the near term, potentially to the psychological level at $100,000 and below.

Most importantly, while not shown in this report, there are signs that the coin has formed a rising wedge pattern, which is characterized by two rising and converging trendlines. This pattern normally leads to more downside in the long term.

MicroStrategy NAV discount is falling 

One key catalyst for the MSTR stock price crash is that its NAV multiple has plunged in the past few months.

Data on its website shows that the NAV multiple has plunged to 1.120, down from last year’s high of over 4. The enterprise value NAV multiple has plunged to 1.335, and there is a risk that it will move below 1 soon.

Falling NAV multiple is a sign that the company is losing its premium, which it uses to raise money. Indeed, Strategy had a policy of not selling shares when its premium dropped below 2.5. It changed this policy in August and has continued selling shares since then. 

The MSTR NAV collapse mirrors that of other companies in the treasury industry. For example, Metaplanet, which is known as Japan’s Bitcoin, has crashed, and its enterprise NAV moved below 1. 

Still, shorting a company like MSTR is risky because it could have a short-squeeze as its short interest has jumped to over 10%.

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