Strategy (MSTR), formerly known as MicroStrategy, represents one of the most polarizing assets in markets today. The company’s aggressive pivot toward accumulating Bitcoin (BTC) as its primary corporate strategy has transformed it from a software business into a leveraged proxy for cryptocurrency exposure.
At current price levels around $235 to $240, Strategy faces two trading scenarios with vastly different outcomes.
Drawing Fibonacci retracement levels from the 2,000 high to the 2,002 low, and subsequently from the 2,002 low to the 2,025 all-time high, reveals two golden pockets that converge into a serious support zone spanning from $190.32 to $216.60.
This confluence area has already proven its worth, as Strategy bounced from this zone, and now trades in the $235 to $240 range.
One additional technical factor further supports the idea of a developing bottom: The daily RSI now stands in the 7th percentile when compared to the past 4,000 daily readings.
Only 7% of days since 2010 have seen a lower RSI value, marking current conditions as extremely oversold.
However, MSTR has formed a death cross pattern, where the 50-day moving average has crossed below the 200-day moving average. Historically, after implementing its Bitcoin Reserve plan, such death crosses on Strategy have preceded multi-month drawdowns.
Still, a compelling contrarian opportunity exists for bullish traders. Bitcoin cycles may be shifting from the traditional four-year pattern to a five-year cycle, a change that would extend the bull market into 2026 instead of triggering the expected bear market. Further, 2025 is not yet finished, leaving room for BTC to surprise to the upside before year-end.
Since Strategy and Bitcoin maintain a correlation above 0.8, any significant Bitcoin rally in the coming weeks would likely carry Strategy higher alongside it. The risk, of course, is that the traditional four-year cycle persists, which would point toward a sharp correction rather than a continuation of recent strength.
Suggested Setup
Considering that the scenario could play out bullish or bearish and cannot be known for certain at this time, two trade plans have been developed: The first is a long setup and the second is a short setup. Each plan targets a separate outcome, depending on which macro and technical signals ultimately dominate.
Long
- Entry: $238
- Stop Loss: $175
- Take Profit: $400
- RR: 2.57
Short
- Entry: $194
- Stop Loss: $230
- Take Profit: $120
- RR: 2.06
Read More: Why Duolingo’s Selloff Could Be Your Golden Entry — Analysis
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