MicroStrategy Stock: The Harbinger of Bitcoin’s Imminent Major Impulse

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In the world of financial trading and investment, a host of different indicators and signals are utilized to predict and respond to market movements. But have you ever considered the price movement of a specific stock as a leading indicator of a cryptocurrency’s performance? One that might potentially indicate an imminent major impulse for Bitcoin? In this article, we will explore this intriguing concept, focusing on the correlation between the performance of MicroStrategy‘s stock and the price of Bitcoin.

MicroStrategy: A Trailblazer for Bitcoin?

Since the summer of 2020, when MicroStrategy, a Virginia-based business intelligence company, first added Bitcoin to its balance sheet, the correlation between the company’s stock performance and Bitcoin’s price movements has been a topic of interest. The company’s foray into Bitcoin, coupled with its stock performance, appears to signal future Bitcoin trends.

The company’s founder and CEO, Michael Saylor, is a strong proponent of Bitcoin (a “Bitcoin maximalist”, some may say), who is well-known on YouTube and social media for his passionate speeches about Bitcoin.

In an era that began in August 2020 and culminated in February 2021, MicroStrategy’s stock made what some analysts refer to as a textbook impulsive five-wave move, marking a significant uptick in its price. Interestingly, this occurrence overlapped with Bitcoin’s all-time high in April 2021— just nine weeks after MicroStrategy hit its peak.

Applying Stage Analysis to MicroStrategy and Bitcoin

To put this into context, we can employ Stan Weinstein’s stage analysis, a technique for segmenting a stock’s lifecycle into four key stages: stage one (accumulation/basing), stage two (uptrend), stage three (distribution), and stage four (downtrend).

In Q1 2023, the accumulation phase appeared to be in effect for MicroStrategy, with heavyweight institutions like Fidelity, BlackRock, and Vanguard collectively purchasing $75 million worth of MicroStrategy’s stock. This move can be viewed as an indirect, yet significant investment in Bitcoin, given that MicroStrategy owns a substantial amount of the cryptocurrency.

Indicators of a Confirmed Breakout

Currently, signals seem to indicate that MicroStrategy’s stock exhibits a confirmed breakout, signifying a potential impending major impulse in Bitcoin’s value. Various analytical tools, including the Ichimoku cloud, the 30-week moving average, and the Relative Strength Index (RSI), have been instrumental in shaping this perspective.

An interesting observation was made in November 2021 when MicroStrategy’s stock hit a lower high, while Bitcoin reached an all-time high. This divergence suggested a peculiarity in Bitcoin’s price movement, lending further credibility to the thesis of MicroStrategy’s predictive nature.

Less Volatility, More Predictability

The reasoning behind MicroStrategy‘s stock being a reliable indicator might lie in its stability compared to Bitcoin. Bitcoin’s price can be significantly influenced by traders during accumulation and distribution phases. However, during expansion phases, this influence diminishes. On the other hand, MicroStrategy’s stock, largely institutionally owned, experiences less day-to-day volatility, thus offering a clearer picture of market trends.

Bitcoin on the Brink of Price Discovery

Interpreting the current Bitcoin market state suggests that it has completed an extensive accumulation range and is now on the cusp of price discovery. Market participants, under the illusion that there is more time to accumulate, may be caught off guard. As such, it’s more crucial than ever to monitor MicroStrategy’s stock as a potential indicator for imminent major movement in Bitcoin’s price.

An Unconventional Conclusion

As unconventional as it may seem, monitoring a company’s stock performance might provide valuable insight into future cryptocurrency movements, with MicroStrategy and Bitcoin serving as prime examples. In a world where traditional financial and cryptocurrency markets are becoming increasingly intertwined, such unique correlations could be the key to unlocking significant investment opportunities. This concept is still in its exploratory stages, and as with all investments, caution and diligence should remain paramount.

Another Way of Trying to Predict Bitcoin’s Price

Another way of attempting to predict Bitcoin’s price with a high degree of accuracy is to look into CoinMarketCap’s well-regarded Bitcoin price estimation feature, which can give major clues on the future performance of BTC. This feature, which takes into account community votes, has been historically accurate 84.46% of the time when predicting the largest cryptocurrency’s movements over the previous six months. The Bitcoin community currently anticipates the average BTC price to be $26,818 by July 31, 2023, which signifies roughly an 11% decrease from its present value. The last price prediction by the community for June 2023 showed an accuracy rate of 82.43%.

Contrastingly, the sophisticated machine learning algorithm on the PricePredictions platform predicts a more optimistic outlook. It forecasts that BTC could climb to $33,329 by the end of July, marking an increase of over 10% from the current price level.

At this juncture, Bitcoin finds itself at a significant crossroad as it aims to overcome a critical resistance zone hovering around $31,000. This area has been a considerable impediment for the world’s most valuable digital asset for over a year. If Bitcoin can successfully navigate past this resistance, the path to the subsequent resistance at $32,500—aligning with the 100-weekly moving average (WMA)—could be clear. Moreover, a notable barrier lies at the 38.2% Fibonacci retracement level around $36,000, offering another considerable challenge for the crypto.