MicroStrategy (MSTR) Shares Rise as Bitcoin Continues Its Bullish Run

Shares of Strategy (MSTR), the world's largest corporate holder of bitcoin that until recently was known as MicroStrategy, rose again

Shares of Strategy (MSTR) rose again Tuesday as the world’s largest bitcoin holder continues to report purchases of the digital currency and investors await an update on the company’s earnings later this week.

The stock, which provides investors with a leverage bet on bitcoin’s price, had gotten a boost to start the week after the company announced its latest purchase of the cryptocurrency. According to a regulatory filing on Monday, Strategy bought 7,390 bitcoin between May 12 and 18, taking its total holding to 576,230 BTC, currently worth more about $61 billion.

Strategy shares have soared 75% from their April low, tracking a recovery in the price of bitcoin and other risk-on assets as investor concerns about global trade tensions and their potential economic impact have subsided. Bitcoin surged above $107,000 on Tuesday, hitting its highest level since January and approaching its record high of just over $109,000.

Below, we take a closer look at Strategy’s weekly chart and apply technical analysis to point out key price levels that investors will likely be watching.

Record High Remains in Focus

Since the 50-day moving average (MA) crossed above the 200-day MA in January last year to form a bullish golden cross pattern, Strategy shares have continued to trend sharply higher.

More recently, the stock has climbed back toward its record high throughout April and May following a retracement to the 50-day MA in March. However, it's worth noting this move has occurred on significantly less trading volume than the two most prior uptrends, indicating that larger market participants may remain on the sidelines.

Let’s identify two key overhead areas on Strategy’s chart to watch if the shares continue their bullish move, while also locating crucial support levels worth monitoring during corrections.

Key Overhead Areas to Watch

A move higher from current levels could bring the $440 level into play. This area may provide overhead resistance near a brief consolidation period that developed on the chart shortly after the stock set its record high last November.

To forecast an overhead area to watch if the shares move into price discovery mode, investors can use the bars pattern tool. We apply this technique by taking the price bars from the stock’s trending move from September to November and reposition them from the beginning of the current uptrend. This analysis, which predicts how a move higher may play out if price action rhymes, projects an upside target of around $945.

Crucial Support Levels

During a correction in the stock, investors should initially monitor the $230 level. This location on the chart could attract buying interest near the February and March troughs, and also closely aligns with a slight pause in the stock’s uptrend during late October.

Finally, a more significant drop could see Strategy shares test lower support around $180. Investors may want to look to place buy limit orders in this region near a trendline that links three peaks that formed on the chart between March and July last year.