Why MSTR Stock Is Poised for a Significant Breakout

MSTR stock has stabilized this month, buoyed by the ongoing recovery of Bitcoin. Investors have stepped in to buy the dip after a significant decline of over 65% from its peak in 2025. Currently trading at $176, an 18% increase from its lowest point this year, we delve into the key factors that suggest the stock could be on the verge of a breakout.

Key Takeaways

MSTR stock has shown signs of recovery after hitting a low of $152.
The technical indicators suggest more upside is likely, especially if it stays above $152.
Bitcoin's price recovery could significantly impact MSTR, given its massive Bitcoin holdings.
MSTR may benefit from external catalysts, including MSCI's decision regarding its indices and a potential short squeeze.

Here’s why MSTR stock is ripe for a big breakout - 1

MSTR Stock Technical Analysis Indicates Potential Gains

The daily chart indicates that MSTR stock found support at $152 earlier this month before climbing to its current price of $176. This upward movement followed the formation of a double-bottom pattern, which is a typical sign of a bullish reversal.

Additionally, there is a bullish divergence pattern visible in the stock's movement. An examination of the Percentage Price Oscillator shows both of its lines trending upwards and approaching the zero line, with the histogram already above zero.

Moreover, the Relative Strength Index (RSI) is also on the rise, moving from an oversold position of 23 to a current level of 52. As such, the most likely outcome is continued growth, with bullish traders aiming for the 23.6% Fibonacci Retracement level at $222, approximately 30% higher than today’s price.

The bullish sentiment will persist as long as the price remains above the double-bottom level of $152. Conversely, if it dips below that level, further decline could be expected, potentially reaching $100.

MSTR stock
Source: TradingView

Bitcoin Price Weekly Chart Signals Potential Rebound

MicroStrategy is the largest holder of Bitcoin, with 687,410 coins valued at over $65 billion. A strong rebound in Bitcoin could lure more investors back to MicroStrategy.

The weekly Bitcoin chart demonstrates that the price has been on a long-term upward trend since December 2022, when it hit a low of $15,370. The coin has formed an ascending channel and is currently near the lower range of this channel.

Historically, Bitcoin has rebounded each time it reaches this support level while remaining above the 100-week Exponential Moving Average. The RSI for Bitcoin is approaching the neutral point at 50, indicating that a rebound towards the key resistance level of $100,000 may be imminent. A breakout above this level could signify further gains, possibly soaring to its previous all-time high of $126,300.

Bitcoin price
Source: crypto.news

If Bitcoin were to retrace its all-time high, the value of MicroStrategy’s Bitcoin holdings would increase from approximately $66 billion to over $86 billion.

MSTR has other potential catalysts that could support a price increase, such as MSCI's decision to keep it in its indices, which would prevent forced selling by asset managers. Additionally, the stock appears to be a bargain with a market NAV of 0.96, and its short interest has moved up to 10%. Companies with high short interest often experience short squeezes, further driving their stock prices up.

In conclusion, with favorable technical indicators, a potential Bitcoin recovery, and supportive external factors, MSTR stock looks well-positioned for a significant breakout in the near future.