Shares of MicroStrategy took a sharp dive on Monday, and if you’re watching the charts, it’s not a pretty picture. The stock formed what technical analysts call a death cross. That’s a pattern that often, though not always, signals more trouble ahead. Some are even pointing to a potential 30% slide from here.
The stock hit a low of $323, which I think is its weakest point since way back in April. It’s now sitting about 40% below its peak from last year. What’s interesting, or maybe worrying, is that it’s doing much worse than Bitcoin itself. BTC is only down about 7% from its high this year. So there’s a clear divergence happening there.
Technical Outlook Looks Rough
Looking at the daily chart, the trend has been firmly down for months now. The price broke below a key support level at $360, which was the low we saw in May. That’s a big deal for the folks who watch these levels.
But the main event is that death cross. It happens when the 50-day moving average dips below the 200-day. It’s one of those classic indicators that traders watch for a shift in medium-term momentum. It doesn’t guarantee a fall, but it certainly suggests the bears are in control.
Other metrics aren’t offering much hope either. The Relative Strength Index is sitting near 30, which is generally considered oversold territory. But it’s still trending downward, which could mean there’s more selling pressure to come. The Percentage Price Oscillator is also heading lower. All this points to a likely test of the next major support level, which is around $230. That would represent a drop of about 30% from where it is now.
The Problem With mNAV and Share Dilution
It’s not just the charts causing concern. There’s a fundamental issue worrying investors. The company’s modified net asset value, or mNAV, has been falling pretty steadily. It’s now at 1.25, which is a big drop from the high of 3.4 it reached last year.
This mNAV number is crucial because it shows the premium investors are willing to pay for MicroStrategy’s Bitcoin holdings. For the longest time, the company had a policy against selling new shares if the mNAV was below 2.5. But Michael Saylor changed that rule back in August.
That change has people nervous. The company’s main way to raise cash has been through at-the-market stock offerings. With the rule change, there’s a growing fear that shareholder dilution could continue, which would further pressure the stock price.
A Wider Trend of Weakness
And it’s not just a MicroStrategy story. If you look around, this seems to be a theme. Other companies known for holding big Bitcoin treasuries, like Metaplanet and Semler Scientific, have seen their shares struggle too. Even Trump Media and Bullish are caught in the downdraft. It appears the appetite for these types of holdings has cooled off considerably for now. Where it stops, nobody really knows.
