Why MSTR Stock Is Ripe for a Big Breakout: Technical Analysis and Bitcoin Catalyst

Source: CryptoNewsNet Original Title: Here’s why MSTR stock is ripe for a big breakout Original Link: MSTR stock has stabilized this month, helped by the ongoing Bitcoin recovery, as investors bought the dip after it crashed by over 65% from its highest point in 2025.

Key Technical Signals

MicroStrategy, the biggest Bitcoin treasury company, was trading at $176 on January 15, up by 18% from its lowest level this year. The stock shows several bullish indicators:

MSTR Stock Technicals

The daily timeframe shows that the stock bottomed at $152 earlier this month and then rebounded to the current $176. This rebound happened after forming a double-bottom pattern, a common bullish reversal sign.

The stock has formed a bullish divergence pattern. A closer look shows that the two lines of the Percentage Price Oscillator have moved upwards and are nearing their zero line. The histogram of this pattern has already moved above the zero line.

At the same time, the Relative Strength Index has also continued rising. It has moved from the oversold level of 23 to the current 52.

Therefore, the most likely scenario is that it continues to rise, with bulls targeting the 23.6% Fibonacci Retracement level at $222, which is ~30% above the current level. The bullish outlook will remain as long as it remains above the double-bottom level at $152. A move below that level will point to more downside, potentially to $100.

Bitcoin Price Weekly Chart Points to a Rebound

MicroStrategy is the biggest Bitcoin holder, with 687,410 coins currently valued at over $65 billion. Therefore, a strong Bitcoin rebound will draw investors back to the company.

The weekly chart shows that BTC price has been in a long-term bull run since December 2022 when it bottomed at $15,370. It has formed an ascending channel and is now hovering near its lower side. This chart shows that it has always rebounded whenever it reached that support level and has remained above the 100-week Exponential Moving Average.

The coin’s RSI is about to cross the neutral point at 50. Therefore, Bitcoin may soon rebound to the key resistance at $100,000. A move above that level will indicate further gains, potentially to its all-time high of $126,300.

If Bitcoin retested its all-time high, the value of MicroStrategy’s Bitcoin holdings would move from the current $66 billion to over $86 billion.

Additional Catalysts

MicroStrategy has other potential catalysts, including MSCI’s decision not to remove it from its indices. Such a move would have led to forced selling by asset managers.

Additionally, it has become a bargain with a market NAV of 0.96, and its short interest has moved to 10%. Highly shorted companies often go through short squeezes.