This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.
Bears in the Strategy (MSTR) market have breached a critical bull market support, leaving bitcoin bears trailing closely.
The technical breakdown highlights the recent breach of the 50-week simple moving average (SMA) by the Strategy share price. This SMA had consistently been a support level since March 2023, acting as a rebound point that sparked buying interest and propelled shares to new highs over the past two years.
However, bears have now established a presence below this significant average, indicating a substantial decline in buying pressure and exposing the stock to potential further losses.
In contrast, bitcoin bears have not yet achieved a similar breakthrough. BTC’s own 50-week SMA has remained a dependable support for the last two years, with prices still above this level despite recent declines from record highs exceeding $124,000.
Essentially, BTC’s overall bullish momentum remains intact.
Nonetheless, the recent technical decline in Strategy requires close monitoring since it is the largest publicly traded BTC holder worldwide, with a stash of 640,250 BTC ($71.73 billion), per Bitcointreasuries.net.
This ongoing BTC accumulation has been a driving force behind the rise from $30,000 to $124,000 over the past two and a half years, making its current price weakness a potential red flag for BTC bulls.
In the first quarter of 2023, both Strategy and bitcoin climbed above their respective 50-week SMAs, initiating noteworthy rallies, with the moving average acting as a dependable support (indicated by boxes) during corrections.
That support has now given way to Strategy bears, with well-known momentum indicators like the weekly MACD histogram indicating bearish signals. Bitcoin’s MACD is also trending downward; it remains uncertain whether its price will follow suit and drop below the 50-week SMA.
Currently, BTC is trading near $111,700, with SMA support at $101,872, according to data from TradingView.
Read: Bitcoin May Tank to $100K as Friday’s BTC Crash Reinforced 2017–21 Trendline Resistance
