Microstrategy price outlook as Bitcoin turns bullish again

By:
on Feb 12, 2022
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  • Microstrategy stock is increasingly more correlated to Bitcoin’s price.
  • Microstrategy continues to add to its Bitcoin purchases.
  • Michael Saylor believes the company can unlock liquidity out of its BTC assets.

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MicroStrategy Incorporated (NASDAQ:MSTR) was in the green all through last week, with a minor correction towards the end of the week. This is strongly correlated to Bitcoin’s price action. Bitcoin started last week bullishly, but towards the end of the week turned slightly bearish. 

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Microstrategy is the largest corporate holder of Bitcoin, and over the last couple of months, its price has shown a strong correlation to the price of Bitcoin. That’s despite the CEO saying investors should value it as a software company. 

Microstrategy CEO doubles down on bullish Bitcoin outlook

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After a string of losses from its Bitcoin investment, Microstrategy has made a profit of $1 billion following the recent Bitcoin price rally. During the company’s recent earnings call, Microstrategy CEO Michael Saylor continues to show strong support for Bitcoin and indicated that Microstrategy intends to unlock value from Bitcoin through leverage. 

He stated that big banks like Goldman Sachs or Morgan Stanley seem to be taking an active role in crypto. This means Microstrategy now has many options to help the company make a lot more money from its Bitcoin holdings.

Microstrategy has been volatile since it started buying Bitcoin, but analysts are still strongly bullish on the stock. Microstrategy has an analyst consensus rating of 1.5, which means it is a strong buy.

Microstrategy technical analysis

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After a price correction that saw Microstrategy drop from a high of $889.12 back on November 21, MSTR entered a consolidation phase between January 24, 2022, and February 4, 2022. It has since gained upside momentum, indicating that bulls are returning to the market. Nonetheless, it had a minor correction towards the end.

Image source: TradingView

This is in line with Bitcoin’s price action over the same period. In essence, now that Bitcoin is overall bullish, Microstrategy could also sustain its uptrend. Its first key resistance is at $459. If this resistance is broken, MSTR could easily test prices above $525 within February or March. 

However, if MSTR turns bearish again and breaks the $317.12 monthly support, it could close the month at prices below $300.

Summary 

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Microstrategy has recovered a portion of its losses after the recent Bitcoin price collapse. Since Bitcoin turned bullish, Microstrategy has also turned bullish and seems to be moving in a similar pattern to Bitcoin. The CEO has stated that Microstrategy intends to unlock value from its Bitcoin holdings through leverage. 

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