Rare Technical Pattern Signals Potential 50% Rebound for MSTR Stock

MSTR stock has shown a rare bullish reversal pattern known as the "Abandoned Baby" on its daily chart. This suggests that the ongoing downtrend might be losing strength, opening up prospects for a significant rebound in the stock price.

Key Takeaways

MSTR’s unusual reversal pattern indicates a higher chance of a significant price rebound.
Bitcoin’s volatility remains a critical risk factor to watch.

The pattern on MSTR hints at a possible recovery, but let’s explore the details further to understand how high the stock might climb.

Rare Technical Pattern Signals Potential 50% Rebound for MSTR Stock

Understanding the "Abandoned Baby" Pattern and Its Implications for MSTR

The "Abandoned Baby" pattern occurs after a pronounced downtrend and consists of three candles: a long bearish candle, a short indecision candle that gaps downward, and a strong bullish candle that gaps upward, leaving the middle candle "abandoned."

Abandoned Baby Pattern Illustrated
Source: Trade Brains

Analyst The Bitcoin Therapist described this pattern as "super rare" in a post on X, indicating its significance in potential market shifts.

Price Potential for MSTR

The chart for MSTR illustrated the Abandoned Baby pattern following a prolonged decline, where the stock price fell about 66% from its peak in 2025, dropping to $155.61 on Monday.

MSTR Daily Chart
Source: TradingView

Following this low point, MSTR saw a recovery of approximately 22.50%, aided by a strong rebound in the Bitcoin market and increasing expectations of a Federal Reserve rate cut in December.

This macroeconomic backdrop has bolstered the bullish sentiment for MSTR, with traders noting several technical confirmations supporting the trend.

Related: Strategy will sell Bitcoin as ‘last resort’ if mNAV drops, capital is unavailable: CEO

On Wednesday, analyst Lark Davis pointed out a hammer candle formation near the lows and an oversold relative strength index (RSI), both of which typically indicate seller exhaustion and signal a potential shift toward buyer dominance.

MSTR Daily Chart
Source: TradingView/Lark Davis

According to options trader Brando, if the current macroeconomic conditions remain the same, MSTR might make an aggressive move above $200 and possibly reach as high as $280—representing a 50% increase from current levels.

MSTR Weekly Chart
Source: TrendSpider/Brando

Dan Dolev from Mizuho Securities predicts that MSTR’s stock price could even rise to $484. However, there are still downside risks if Bitcoin experiences more volatility, especially if inflows into spot ETFs diminish or expectations for December rate cuts decline, which could negatively impact MSTR more significantly.