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Analyst Jimmy Coates believes that Strategy (MSTR) stock has shown one of the strongest technical signals this week, with multiple indicators clustered around the $195 level, which could pave the way for a rally of more than 45% if Bitcoin experiences a new breakout.
The stock is recording volume similar to the “capitulation” phase of a hammer candle, plus a technical crossover suggests a possible trend reversal.
Above the $195 area, the low liquidity zone extends to $285, with liquidity quickly rising if demand returns.
JPMorgan’s analysis supports this scenario as it believes that the trend in Bitcoin is related to Strategy’s ability to maintain the ratio between the company’s value and its Bitcoin holdings above 1, which is currently close to 1.13, and its strong cash reserves.
The bank also believes that the remaining stocks in the MSCI index may support a Bitcoin price rebound to $170,000 in the medium term.
Still, the company continues to significantly reduce the pace of its Bitcoin purchases and may sell some of its holdings as part of a risk management plan.
But other analysts believe the stock is undervalued, as CryptoQuant data shows the value of the company’s bitcoin (about 650,000 BTC costing $74,400) exceeds its current market value by about 78%.
The stock is currently trading at about $186, well below its yearly peak of $457.
Also read:
Ethereum Price Struggling to Maintain $3,000 Levels… Is $3,700 the Next Target?
Buying 300,000 Bitcoins for $84,000: Does this area constitute a new price floor?
