The stock of Strategy, MSTR, formed a rare bullish reversal signal in technical analysis known as the “Abandoned Baby,” on its daily chart, suggesting that a severe downtrend may be losing momentum.
Key takeaways
What price levels could MSTR reach after forming this pattern? Let’s dive in.
Why is the Abandoned Baby pattern bullish for MSTR?
The Abandoned Baby pattern occurs after a steep downtrend and consists of three candles: a lengthy bearish candle, a small indecision candle that gaps lower, and a robust bullish candle that gaps higher, leaving the indecision candle “abandoned.”
Analyst The Bitcoin Therapist referred to the pattern as “super rare” in an X post on Thursday, stating:
“Studies and large quantitative firms indicate that it’s one of the most trustworthy reversal signals available. In layman’s terms: it’s the market’s equivalent of a unicorn.”
What price targets could MSTR hit next?
MSTR’s charts exhibited the Abandoned Baby pattern after enduring a multi-month downtrend, during which its prices fell approximately 66% from their peak in 2025, hitting $155.61 on Monday.
The stock rebounded by about 22.50% from the low on Monday, aided by a strong recovery in the Bitcoin (BTC) market amid increasing expectations of a Federal Reserve rate cut in December.
The broader market conditions bolstered MSTR’s bullish outlook, with traders pointing to various technical confirmations.
Related: Strategy will liquidate Bitcoin as a ‘last resort’ if mNAV declines and capital is not available: CEO
On Wednesday, analyst Lark Davis noted the emergence of a hammer candle near the lows and an oversold relative strength index (RSI), both of which typically signal seller fatigue and a potential shift in risk-reward back to buyers.
Options trader Brando forecasted an “aggressive move back above 200,” and possibly up to 280, representing a 50% increase from current prices, should the existing macro and technical conditions persist.
He remarked:
“MicroStrategy has reached a point where the risk-to-reward ratio is beginning to shift significantly to the upside. A lot of bearish sentiment surrounding this name lately could create an opportunity as many are anxious.”
Dan Dolev, an analyst at Mizuho Securities, predicted that MSTR could see a price target of $484.
However, downside risks remain if Bitcoin becomes volatile again, particularly if spot ETF inflows diminish or expectations for a December rate cut dissipate, which could impact MSTR more severely.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
