This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Strategy (MSTR) bears have pierced a key bull market support, leaving bitcoin BTC$111,506.46 bears trailing behind.
The technical breakdown centres around the Strategy share price’s recent breach of its 50-week simple moving average (SMA). This SMA had consistently acted as a springboard since March 2023, marking the end of corrective pullbacks and triggering buying interest that propelled shares to new highs for over two years.
But, in recent weeks, bears have managed to establish a foothold below this crucial average, signaling a significant weakening in buying pressure and exposing the stock to further downside.
Bitcoin bears, by contrast, have yet to achieve this. BTC’s own 50-week SMA has served as a reliable springboard over the past two years, with prices still holding above that level despite pulling back from record highs above $124,000.
In essence, BTC’s broader bullish trajectory remains intact.
Nevertheless, the recent technical deterioration in Strategy warrants attention, as it’s the largest publicly-listed BTC holder in the world, with a coin stash of 640,250 BTC ($71.73 billion), according to Bitcointreasuries.net.
Its sustained BTC accumulation has been a key driver of the rally from $30,000 to $124,000 over the past two and a half years, making its current price weakness a potential cautionary signal for BTC bulls.
Both Strategy and bitcoin simultaneously broke above their respective 50-week SMAs in the first quarter of 2023, embarking on impressive rallies, with the moving average serving as a reliable floor (marked by boxes) during corrections.
The floor has now given way to Strategy bears, with popular momentum indicators like the weekly MACD histogram flashing red. Bitcoin’s MACD is also in the red; whether its price will follow suit and break below the 50-week SMA remains to be seen.
As of writing, BTC changed hands near $111,700, with the SMA support at $101,872., per data source TradingView.
Read: Bitcoin May Tank to $100K as Friday’s BTC Crash Reinforced 2017–21 Trendline Resistance