MSTR’s 685-Day Bitcoin Descent?

by

Strategy (MSTR), the stock that’s as reliable as a teapot on a mountain, continues to mirror Bitcoin’s price antics.

This connection is thanks to Strategy’s Digital Asset Treasury, which, in a bid to accumulate Bitcoin, has been hoarding over 41,000 of the digital coins like a dragon with a treasure. A noble endeavor, if slightly less exciting than a squirrel’s grocery list.

Both assets took a nosedive as sentiment remained as bearish as a tax auditor in a haunted house. MSTR plummeted 65% from its $543 peak, while BTC nosedived 37% from $126,000. A performance so lackluster, it could put a sloth to sleep.

Their correlation, a staggering 0.95, proves that MSTR is as in sync with Bitcoin as a sock and a sock. A bond forged in the fires of chaos.

Fractal patterns point to more downside

A fractal that’s more bearish than a tax audit suggests more downside risk for both assets. The structure is as predictable as a toddler’s tantrum, mirroring MSTR’s 2021-2023 cycle, when the stock entered a prolonged decline marked by lower highs and lower lows. That phase lasted 689 days and saw about $3.34 billion in traded volume. A period so dull, it could make a spreadsheet weep.

The current pattern began in late 2024 and could extend roughly 685 days, with projected volume near $5.09 billion, according to Joao Wedson. A timeline so precise, it’s like a clockwork mouse in a Swiss watch.

Selling pressure escalated after Strategy’s directors sold shares near the November 2024 peak. Wedson, ever the optimist, estimates MSTR could drop to $70-$80 from its $145 peak, which is like predicting a rainstorm in a desert.

“I estimate a fair price around $70-$80 per share, as each bear market cycle tends to produce smaller drawdowns,” Wedson said. A statement so hopeful, it could convince a cactus to bloom.

A move to $70 would represent roughly a 50% decline from current levels. Based on historical correlation, that scenario could drag Bitcoin [BTC] toward the $58,000 region, with deeper projections remaining less probable. A financial rollercoaster with a “no thrill” guarantee.

Bitcoin’s recovery remains uncertain

Bitcoin’s broader recovery remained uncertain when viewed through holder-based Realized Price signals. A puzzle so complex, it’s like solving a Rubik’s Cube while blindfolded and riding a unicycle.

Historically, bull markets began when the Short-Term Holder Realized Price crossed above the Long-Term Holder Realized Price. Bear markets, by contrast, ended once Long-Term Holder Realized Price moved above short-term levels. A game of musical chairs with no chairs.

The charts showed a persistent gap between short- and long-term holder prices, marked by the absence of confirmed green reversal signals. Until that spread narrowed, downside risk remained elevated. A situation so dire, it’s like waiting for a train that’s never coming.

That structure kept traders focused on whether long-term holders would begin absorbing supply at lower levels. A question as relevant as asking a ghost if it’s haunted.

Institutional investors step back in

Institutional behavior, which had been as stable as a Jell-O sculpture, showed early signs of stabilization. A miracle, if ever there was one.

Despite Bitcoin revisiting April 2025 price levels, U.S. Spot Bitcoin ETFs recorded $561.9 million in net inflows on February 2nd, marking the first positive daily flow since mid-January. According to SoSoValue, who’s probably more optimistic than a goldfish in a fishbowl.

That shift suggested the two-week institutional selling streak may have paused. A pause so brief, it’s like a blink in a world of slow motion.

Even so, sustained inflows would be required to offset the broader bearish structure. A task as achievable as convincing a cat to fetch a ball.

Without confirmation from on-chain holder metrics, any rebound could remain corrective rather than trend-defining. A financial version of a “maybe tomorrow” promise.

Final Thoughts

  • Strategy [MSTR] has mirrored its 2021-2023 fractal, a move that’s as reliable as a broken clock. A $70-$80 target could drag Bitcoin down to $58,000, if the universe allows.
  • Short-Term Holder Realized Price remains below Long-Term Holder levels, though $561.9M in ETF inflows hints at early institutional support. A glimmer of hope, if you squint hard enough.

Read More

2026-02-03 21:47