MicroStrategy’s Woes: Will the Dreadful Decline Ever Cease?

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Alas, dear reader, it seems that the price of MicroStrategy has plummeted nearly 22% over the span of a month, mirroring Bitcoin’s own dismal decline of approximately 23%. Such unfortunate events have not only cast a pall over our beloved cryptocurrency but also placed significant pressure upon MicroStrategy’s sizable treasury of BTC. Recent estimations reveal that the company is languishing under more than $3.5 billion in unrealized, or shall we say, “paper,” losses on its Bitcoin holdings.

This distressing downturn has compelled numerous Wall Street firms to drastically reduce their price targets, including one particularly audacious analyst who has slashed theirs by a staggering 60%. Yet, should one delve into the depths of technical charts and capital flow data, there remains a whisper of hope that MicroStrategy’s prospects for recovery are not entirely shattered. Permit me to elucidate further.

The Enigmatic Bullish Wedge and the Rising CMF: A Curious Case of Wealthy Investors

Despite recent tribulations, MicroStrategy’s daily chart continues to play a delicate dance within the confines of a falling wedge pattern. This peculiar formation often suggests that the pressure of selling is easing, hinting at a potential rebound, should resistance be vanquished. Moreover, the upper trendline draws near, aligning charmingly with the 20-day exponential moving average-a rather sophisticated term, I must admit.

Historically, this pattern has proven favorable for our poor MicroStrategy; indeed, in early October and once again in mid-January, the stock experienced a delightful rally of 10% to 15% following a fortuitous reclaiming of its 20-day EMA, which, if you must know, reacts rather swiftly to the caprices of price changes.

As previously noted, that very same 20-day EMA now resides tantalizingly close to the upper boundary of the wedge, suggesting that a breakout might transpire with alarming rapidity should the purchasing strength return.

Additionally, we must consider the Chaikin Money Flow, or CMF, which serves as an astute measure of whether our affluent investors are engaging in the delightful pastime of adding to their assets or, heaven forbid, withdrawing funds. Since January 12, the CMF has exhibited a remarkable upward trend, even as the stock price has taken a downward turn-how curious!

This creates what one might call a bullish divergence; while the price is tumbling, the inflow of considerable sums appears to be on the mend.

This aligns, rather amusingly, with recent reports indicating that MicroStrategy’s Bitcoin position currently rests atop more than $3.5 billion in unrealized losses. Yet, despite such dismal tidings, our wealthy investors have not succumbed to panic; rather, they continue to invest quietly, akin to mice scurrying about in the night.

BREAKING: Losses on MicroStrategy’s, $MSTR, Bitcoin position officially rise above $3.5 billion.

The company’s Bitcoin position has lost nearly -$40 BILLION in 4 months.

– The Kobeissi Letter (@KobeissiLetter) February 5, 2026

Desire further insights on this matter? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here.

Together, the falling wedge and the rising CMF imply that institutional buyers remain steadfast in their pursuit of a rebound, refusing to abandon ship amidst the tumult.

Analyst Targets Dwindle as MFI Reveals Weak Retail Enthusiasm

While the illustrious Michael Saylor enjoys the backing of substantial funds, the sentiment among Wall Street appears decidedly gloomy.

Canaccord Genuity, a firm of financial services, has recently diminished its price target for MicroStrategy from a lofty $474 to a mere $185, a drop of approximately 60%. One cannot help but wonder if such a downgrade was prompted by Bitcoin’s disheartening descent and the mounting risk tied to the company’s leveraged treasury strategy.

Yet, in spite of this, other firms persist in rating the stock as a “buy,” maintaining an average target well above current prices, thus creating a rather comical division in expectations.

The rationale behind such divergence becomes manifest when one examines the Money Flow Index, or MFI.

The MFI tracks the ebbs and flows of buying and selling pressure, employing both price and volume as its loyal companions. It serves to judge whether retail traders are engaging in the spirited pursuit of buying dips or exhibiting a more cautious demeanor.

Between January 30 and February 4, MicroStrategy’s price waned, and lo and behold, the MFI declined right alongside it. There was no robust bullish divergence in sight. In simpler terms, while the larger investors accumulate in a fashion reminiscent of hoarding squirrels, the smaller traders remain rather tentative.

This conflict is indeed the crux of the matter. Sustainable rallies typically require both institutional endorsement and vigorous retail participation. Presently, it appears that only one side has made a grand appearance at this soiree.

This hesitation elucidates why certain analysts are lowering their targets, even as others maintain an optimistic façade.

Key MSTR Price Levels to Monitor with Bated Breath

The final piece of this perplexing puzzle lies within the price structure and support levels.

For MicroStrategy to reclaim its former glory, it must first secure the $140 zone, a bastion of psychological resistance and trend confirmation. A clean daily close above this threshold would nudge the price back towards the wedge breakout zone and near the revered 20-day EMA.

Should such a breakout occur, the next major target looms near $189. This level bears significance for three reasons:

Firstly, it aligns with a notable Fibonacci retracement zone, which often acts as formidable resistance and support areas where the price may react dramatically. Secondly, it closely matches Canaccord’s revised target of $185, indicating that analysts are fixated on the same technical territory.

Lastly, it sits near the midpoint of recent consolidation ranges, making it an appealing magnet for price. Should $189 break, the full upside projection of the falling wedge points towards a delightful range of $225 to $230, representing an approximately 63% upside from recent figures. This zone also coincides with the lower price target set by the analysts.

However, should the price fail to reclaim $140, the entire bullish setup may weaken considerably. In such a case, one must brace for potential downside risks approaching $109, especially if Bitcoin continues its lamentable descent.

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2026-02-05 19:41