MicroStrategy stock price crashes! MSTR plunges with a target of $63, showing clear divergence signals.

MicroStrategy (NASDAQ: MSTR) remains the largest corporate holder of Bitcoin. However, since 2025, a clear divergence has emerged between the two. Bitcoin continues to hit all-time highs, while MicroStrategy’s stock price remains weak, with diminishing growth momentum. MicroStrategy’s stock peaked at $543 in November 2024, then entered a sideways consolidation phase. Elliott Wave analysis warns of an eventual sharp decline to a target price of $63.

Historical Divergence Between Bitcoin and MicroStrategy Stock Price

Since November 2022, there has been a significant positive correlation between MicroStrategy (formerly Strategy, previously MicroStrategy) and Bitcoin. This correlation stems from CEO Michael Saylor’s aggressive Bitcoin strategy, where the company has converted most reserves into Bitcoin and continues to purchase more through debt issuance and equity financing. Under this business model, MicroStrategy’s stock price essentially acts as a leveraged investment vehicle on Bitcoin’s price. When Bitcoin rises 10%, MSTR’s stock typically rises 15-20%, as the market prices in not only the appreciation of Bitcoin holdings but also the company’s ability to continue buying Bitcoin in the future.

However, this relationship broke down after two years. MicroStrategy’s stock peaked at $543 in November 2024 and then entered a sideways consolidation. Meanwhile, Bitcoin continued to climb, reaching new highs from about $70,000 in November 2024 to the current $103,000, an increase of over 47%. Logically, MicroStrategy’s stock should have moved in tandem or even outperformed Bitcoin’s gains, but in reality, MSTR failed to keep up and hit a new low for the year. In contrast, Bitcoin remained above its April 2025 lows.

This divergence reveals a market reassessment of MicroStrategy’s valuation logic. Possible reasons include: first, concerns over the company’s high debt levels, as continued debt issuance to buy Bitcoin poses significant risks in a bear market. Second, the premium of MicroStrategy’s stock relative to its Bitcoin holdings has become excessive, with investors preferring to buy Bitcoin ETFs directly rather than paying premiums for MSTR. Third, the company lacks other growth points beyond Bitcoin investments, with its software business stagnating long-term. Fourth, rising regulatory risks, as the SEC may scrutinize this highly leveraged Bitcoin investment strategy.

Elliott Wave Analysis: Double Three Correction in Progress

(Source: TradingView)

The daily chart of MSTR confirms a downtrend. Since the high in November 2024, the stock has broken below the lows of February 2025. This confirms that a larger double three correction is underway. Elliott Wave theory, one of the most precise yet complex technical analysis tools, suggests markets move in specific wave patterns, including impulsive waves (upward) and corrective waves (retracements). The double three correction is a complex corrective pattern composed of three corrective structures.

This wave completed the “w” wave in February 2025. Subsequently, the “x” wave rebounded higher. Currently, the “y” wave is still ongoing. The “w” wave reached the 61.8%-76.4% Fibonacci retracement zone. Therefore, a three-wave rebound in the “x” wave is likely to occur soon. However, the downtrend should resume afterward. The identification of this wave structure is based on the relationship of price time and magnitude, as well as the ratios between sub-waves.

Elliott Wave Double Three Correction Structure

(Source: TradingView)

“w” wave: The initial decline from November 2024 to February 2025, completed

“x” wave: The correction rebound from February to April 2025, weaker in momentum

“y” wave: The ongoing second decline, potentially similar or deeper than “w” wave

The ultimate long-term target price ranges from $138 to $63. This target is calculated by projecting the decline of the “w” wave from $543 down to about $200 (a drop of approximately $343) onto the start of the “y” wave, which begins around $400 after the “x” wave. The target zone thus falls between $57 and $138. The $63 level represents an extreme pessimistic scenario, while $138 is a more moderate correction target.

Once this buy zone is reached, MicroStrategy’s stock price is expected to rebound strongly. Investors should prepare for the next rally. Ideally, this new upward phase could start next year. According to Elliott Wave theory, after an correction wave ends, a new impulsive wave typically begins, often surpassing previous highs. If MSTR falls to $138 or even $63, it would present a rare bottom-fishing opportunity.

Multiple Technical Deterioration Signals for MicroStrategy

This divergence indicates potential technical damage. From a technical indicator perspective, MSTR’s Relative Strength Index (RSI) has been below 50 for a long time, signaling persistent selling pressure. The Moving Average Convergence Divergence (MACD) has maintained a bearish crossover since late 2024, with the fast line remaining below the slow line, confirming a downtrend. Volume analysis shows that down days tend to have higher volume than up days, characteristic of a bearish market.

Price structure analysis reveals that MicroStrategy’s stock has broken below several key support levels. The February 2025 low around $250 has been breached, with the next support at the psychological $200 level. If $200 also fails, technical deterioration will accelerate, potentially pushing the price down to the $150–138 zone. The stock also hit a new yearly low, a highly bearish signal in technical analysis, indicating that all investors who bought during the year are now in loss.

MicroStrategy’s relative performance also worsens. The divergence from Bitcoin has been discussed, but even compared to the Nasdaq index, MSTR’s performance this year is significantly lagging. The Nasdaq 100 index has gained about 15% year-to-date, while MSTR has declined, showing it has not benefited from the tech bull market and faces additional individual stock risks.

On the sentiment side, institutional holdings data show some large funds reducing their positions in MSTR. Such institutional selling is often an early sign of trend reversal, as institutional investors have more resources for research and risk management. Their collective reduction in holdings suggests concerns about MicroStrategy’s outlook. Additionally, insider trading data, such as executives or directors selling shares, would be an even clearer bearish signal.

Investor Strategies and Risk Management

MicroStrategy (MSTR) is currently experiencing daily pullbacks. Traders can consider short-term rebounds as opportunities to sell. According to Elliott Wave theory, the “x” wave is likely to produce a three-wave rebound soon, providing a window for holders to reduce or close positions. Short-term traders might even consider shorting on a rebound to $300–350, with stops above the “x” wave high.

Meanwhile, investors should wait for an extreme zone before buying again. Using Elliott Wave strategies can help pinpoint entry points, such as after the completion of the 3rd, 7th, or 11th wave correction. The impulsive wave in Elliott Wave typically contains 5 sub-waves, while the corrective wave contains 3 sub-waves. If the current “y” wave completes in a three-wave structure, a bottom near $138 is likely. More complex corrections with 7 or 11 waves could push the price down to the extreme zone of $63.

Furthermore, the proprietary blue-box system can accurately mark high-probability zones. This rigorous approach helps traders clearly understand market trends and build confidence to seize the next rally. The blue-box system is a comprehensive analysis tool based on multiple technical indicators and wave theory, capable of identifying high-probability reversal areas.

MicroStrategy Stock Operation Recommendations

Holdings: Use short-term rebounds (possibly to $300–350) to gradually reduce positions and lower risk exposure.

Short-term traders: Consider shorting on rebounds at resistance levels, with strict stop-losses.

Long-term investors: Wait until the price drops to the $138–$63 zone before considering accumulation, aiming for a new rally next year.

Risk Management: All trades should have stop-loss orders to avoid unexpected losses amid volatility.

From a risk-reward perspective, current levels offer limited attractiveness. Buying around $250 exposes downside risk of 50–75%, while upside potential during the “x” wave rebound might be only 20–30%. Conversely, patiently waiting for a drop to $138 or lower improves risk-reward ratio significantly. Buying at the bottom zone and then seeing a rebound to $300 could yield over 100% profit.