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MicroStrategy Inc (NASDAQ:MSTR) continues its audacious bet on Bitcoin (CRYPTO: BTC), recently purchasing $1.11 billion worth of the cryptocurrency between August and September.
This latest buy brings the company's Bitcoin holdings to a staggering 244,800 coins, now valued at approximately $9.45 billion.
As MicroStrategy increasingly ties its fortunes to the volatile world of Bitcoin, investors are left wondering: Can the stock keep its momentum, or is a correction looming?
MicroStrategy CEO Michael Saylor's commitment to Bitcoin has sent the stock up 96% year-to-date and a whopping 295% over the past year. The company is raising an additional $700 million through convertible bonds to buy more Bitcoin, signaling it's not slowing down anytime soon.
But while the long-term strategy might pay off, the near-term technical picture raises some concerns.
Read Also: MicroStrategy Is ‘Aggressive’ With ‘BTC HODL’, Analyst Says, Citing New Bitcoin Buys
Despite the bullish sentiment surrounding MicroStrategy's Bitcoin investments, the technical analysis presents a more cautious outlook.
Chart created using Benzinga Pro
Chart created using Benzinga Pro
These mixed signals hint that the stock could be approaching a consolidation phase. Investors may want to be cautious, as momentum indicators show the potential for a pullback.
MicroStrategy first ventured into Bitcoin in 2020, positioning the digital asset as a hedge against inflation. Fast forward to 2024, and Saylor's relentless focus on Bitcoin has turned MicroStrategy into a proxy for the cryptocurrency.
Regulatory uncertainties and Bitcoin's intrinsic volatility remain the primary risks to MicroStrategy's future performance.
Still, with Bitcoin ETFs making the asset class more mainstream, the company could be well-positioned to benefit from broader adoption. Yet, the technical signals suggest the stock may need to regroup before resuming its upward march.
MicroStrategy's continued Bitcoin buying spree has put it at the center of the crypto market's expansion. While the company's long-term bullish outlook on Bitcoin remains intact, short-term technical signals suggest a possible slowdown in MicroStrategy's stock rally.
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