MSTR’s price has fallen nearly 22% over the past month, roughly matching Bitcoin’s decline of about 23% over the same period. As Bitcoin’s vulnerabilities deepen, so does the pressure on MicroStrategy’s massive BTC vault. Recent estimates indicate more than $3.5 billion in unrealized, or “paper” losses on Bitcoin holdings.
The drawdown has forced some Wall Street companies to lower their price targets, including a steep 60% cut by one leading analyst. Still, technical charts and capital flow data suggest that MicroStrategy’s long-term rebound scenario is not completely defeated. Here’s what the chart actually shows:
Bullish Wedge and Rising CMF Still Show Big Money is Buying
Despite the recent losses, MicroStrategy’s daily chart continues to trade within a descending wedge pattern. It often indicates that selling pressure is easing and a pullback may continue once resistance breaks. Additionally, the upper trendline is close and currently coincides with the 20-day exponential moving average.
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Historically, this pattern has worked well for MSTR. After regaining its 20-day exponential moving average (EMA), the stock rose 10% to 15% in early October and again in mid-January. EMA is a trend line that reacts quickly to price changes.
As mentioned earlier, the same 20-day EMA sits near the upper end of the wedge. This means that a breakout could occur quickly if buying power returns.
Another important signal comes from Chaikin Money Flow (CMF). CMF uses price and volume data to measure whether large investors are putting money into or withdrawing money from assets. Since January 12th, CMF has been on an upward trend despite the decline in stock prices.
This creates a bullish divergence. Although prices are falling, huge capital inflows are improving.
This is in line with recent reports indicating that MicroStrategy’s Bitcoin positions have unrealized losses of more than $3.5 billion. However, large investors did not retreat in a panic. Instead, capital continues to quietly flow in.
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The decline in the wedge combined with the rise in CMF suggests that institutional buyers are still positioning for a rebound rather than abandoning the stock.
Analyst targets decline as MFIs show weak retail purchasing pressure
While big money is backing Michael Saylor’s strategy, Wall Street sentiment has clearly weakened.
Financial services firm Canaccord Genuity recently lowered its target price on MicroStrategy from $474 to $185, a drop of about 60%. This downgrade is likely related to Bitcoin’s decline and the increased risks associated with the company’s leveraged financial strategy.
At the same time, other companies continue to rate the stock as a Buy, with average price targets well above the current price. This created a clear rift in expectations.
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The reason for this disparity becomes clearer when we look at the Money Flow Index (MFI).
MFIs track buying and selling pressure using both price and volume. This is often used by retail traders to determine whether they are aggressively buying the dip or remaining cautious.
From January 30th to February 4th, MicroStrategy’s price fell, and MFI’s price fell along with it. There was no strong bullish divergence. This means that retail buyers are not yet actively participating. Simply put, big investors are raising money, but small traders remain hesitant.
This conflict is key. Sustainable gatherings typically require both organizational support and strong retailer participation. For now, only one side is clearly present.
This hesitation helps explain why some analysts are lowering their targets even as others are optimistic.
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Key MSTR Price Levels to Track Now
The final piece of the puzzle is pricing structure and support levels.
For MicroStrategy to regain its technical strength, it must first regain the $140 zone. This area serves as both a psychological resistance and a confirmation of trends. If the daily close is above $140, the price will approach the wedge breakout zone and return near the 20-day EMA.
If a breakout occurs, the next major target will be around $189. This level is important for three reasons:
First, it coincides with a major Fibonacci retracement zone. Fibonacci levels often act as strong resistance levels and support areas where price reacts. Second, this is roughly in line with Canaccord’s revised target of $185, indicating that analysts are focused on the same technical zone.
Third, it sits near the midpoint of its recent range of declines, providing a natural pull for the price. In the event of a breakout of $189, the complete upside forecast for the descending wedge points to $225 to $230, or about 63% upside from recent levels. This zone also coincides with the analyst’s lower target.
However, failure to recover $140 will weaken the entire bullish setup. In that case, the downside risk to $109 would increase, especially if Bitcoin continues to fall.
