MSTR Stock at Risk as Bitcoin Price Forms Scary Pattern Ahead of Trump-Iran Attack

Key Insights

• MSTR stock price could be on the verge of a strong bearish breakout to $100.
• Bitcoin price has formed a bearish pennant pattern on the daily chart.
• Odds of Trump attacking Iran have jumped in the past few days.

The MSTR stock price remained in a tight range this week, mirroring the performance of Bitcoin and other cryptocurrencies. Strategy was trading at $125, down substantially from its all-time high. It could be at risk of a big dive as Bitcoin has formed a highly bearish chart pattern ahead of a potential Iran attack by Donald Trump.

Bitcoin Price Could be at Risk of a Dive as Headwinds Rise

MicroStrategy has grown to become the biggest Bitcoin holder with over 717k coins. As a result, its performance has a close correlation with Bitcoin, a cryptocurrency that is facing heightened technical and fundamental risks.

For example, data compiled by SoSoValue shows that all spot Bitcoin ETFs shed over $133 million in assets on Wednesday. They have now shed over $916 million this month and over $7 billion since November last year.

At the same time, activity in Bitcoin’s CME futures has continued to wane this month, while the futures open interest has dropped to $40 billion. At its peak last year, the open interest was worth over $90 billion.

This trend has led to a significant decline in the Coinbase Premium Index, a sign of weak institutional demand. Bitcoin has let institutional investors down because it has not lived to expectations. For example, its role as a safe-haven asset has been debunked. Similarly, it has not become a good hedge against currency debasement.

Bitcoin price may soon face some major headwinds as Donald Trump prepares to attack Iran. Polymarket data shows that odds of an attack happening by March 31st have jumped to 62%.

According to the FT, the US military has told the White House that it is ready to attack. The report added that Trump aims to execute a limited attack lasting a few weeks. However, Iran has warned that any attack will lead to a regional war that could last months.

A war in Iran would have a major impact, including by raising volatility in the market and by boosting crude oil prices. Therefore, these fundamentals may lead to a lower Bitcoin and MSTR stock price.

Bitcoin Price Technical Analysis

Technical analysis suggests that the Bitcoin price will also crash further soon. The daily timeframe chart shows that the coin remains below all moving averages, while the Supertrend indicator has turned red.

Most notably, the coin has formed a bearish pennant pattern. This pattern is characterized by a vertical line and a symmetrical triangle. It has completed the formation of the vertical line or flagpole and is now forming the triangle pattern.

Therefore, the most likely scenario is that the coin continues to fall, potentially to the year-to-date low of $60,000. A break below that level will point to more downside in the near term.

MSTR Stock Price Technical Analysis as New Death Cross Nears

The three-day chart shows that MSTR stock has been in a strong downward trend over the past few months. Worse, it is about to form a death cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other. The death cross has already formed on the daily chart, and its appearance on the three-day chart will signal greater risk.

The stock has also dropped below the 78.6% Fibonacci Retracement level. It has also fallen below the Supertrend indicator, while the Relative Strength Index (RSI) has moved into the oversold territory.

Therefore, the most likely scenario is that the stock continues to fall in the near term. The next key target to watch will be the psychological level at $100. On the flip side, a move above the important resistance level at $150 will invalidate the bearish outlook.

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