Strategy (MSTR): The Best Bitcoin (BTC) Play Right Now? Full Analysis

While Bitcoin has been beaten down, Michael Saylor’s Strategy has literally plunged. To top it all, a potential MSCI exclusion, and rumours that JP Morgan is executing a ‘hit job’ against Strategy, make this an extremely unloved and unwanted equity. Is this the time to buy?

While Strategy defends itself from all the bearish news and the oft-announced possibility on social media that a $BTC price fall to below $25,000 would result in margin calls for Strategy, the MSTR price is actually at a very buyable level.

MSTR at a bottom?

Source: TradingView

The weekly chart for MSTR shows that the price has arguably reached a bottom. Looking left, it can be seen that the horizontal support is sitting on top of previous price structure. This is likely to be a very strong level. Given that the price has already fallen through the last Fibonacci level of 0.786, MSTR is now very beaten down.

That said, the Stochastic RSI for the weekly time frame has its indicators just in the process of crossing up. If one also takes into account that the 2-week, and even the monthly Stochastic RSI indicators are at the bottom, a bounce from hereabouts looks increasingly likely, and as can be seen in the chart, has probably just begun.

For future targets, $200 will need to be reclaimed first. After this, the ascending trendline at $260 and above is the key to a complete recovery or a revisit of the lows.

MSTR against the SMH

Source: TradingView

The SMH ticker on TradingView is an ETF of all the major chip manufacturers, and as such it is another way to judge the strength of the economy, given that some of the biggest companies in the world comprise it (Nvidia (NVDA), TSM, Broadcom (AVGO), AMD etc.)

Contrasting the MSTR price with SMH gives the chart above.

This 2-week chart is showing that the MSTR/SMH ratio has arguably reached a bottom. That said, it would be good to see the first signs of a MSTR recovery, given that an entry would be like trying to catch a falling knife. 

However, all the Stochastic RSI indicators are at the bottom, so a turn back in favour of MSTR will perhaps happen soon.

MSTR soon to outperform BTC?

Source: TradingView

The first thing that the MSTR bulls must do is turn the ratio around against $BTC (MSTR/BTCUSD). Since November 2024, MSTR is 66% down against $BTC. This is normally the case. When $BTC goes up, MSTR goes up faster, and when $BTC goes down, MSTR goes down faster. Therefore, MSTR is like a leverage play on $BTC.

The above weekly chart illustrates that the ratio has arrived at a strong support level. If this doesn’t hold, there is another below, and this lines up with the 0.786 Fibonacci. 

MSTR could be about to start on its next leg of outperforming $BTC. If it does so, it is likely to outperform the S&P 500 and the vast majority, if not all, of the companies in it. If technical analysis rather than news is what counts, this looks like an intelligent bet. Who will take it?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.