MicroStrategy stock price rose by 3% Monday as Bitcoin retested resistance at $70,000. The surge comes amid a broader rally in Bitcoin-related stocks.
Bitcoin-related stocks rallied in the pre-market as Bitcoin (BTC) rebounded. MicroStrategy (MSTR) soared to $1,828, its highest point since March 28.
MicroStrategy’s upward trend coincides with the overall bullish sentiment in the crypto market. The stock has outperformed Bitcoin and spot ETFs like IBIT, FBTC, and ARKB, rising over 177% this year, whereas Bitcoin is up by 57%.
Other companies such as Riot Platforms, Marathon Digital, and Core Scientific also saw gains of over 5% in the pre-market. Coinbase, the biggest crypto exchange in the US, rose by 4% ahead of its upcoming earnings.
MicroStrategy stock price was higher by 3% Monday morning as Bitcoin retested the crucial resistance at $70,000.
MicroStrategy’s stock benefits when Bitcoin rallies due to its substantial holdings. The company, the largest Bitcoin holder globally, has 226,331 coins. It recently added more coins, using part of the $700 million raised in June.
At the Bitcoin Conference in Tennessee, Michael Saylor, MicroStrategy’s Chairman, predicted that Bitcoin would rise to $13 million. VanEck forecasted a rise to $2.9 million by 2050.
Bitcoin’s upside potential is reinforced by record-high futures open interest and a breakout above the upper side of the falling broadening wedge chart pattern, a bullish indicator. The coin has entered the third phase of the three drives pattern.
The next key event for MSTR stock is its upcoming earnings on August 1. Analysts estimate revenue to have increased to $121 million in Q2 from $115 million in Q1. This would surpass the $120 million from the same quarter in 2023.
MicroStrategy’s earnings don’t significantly impact its stock due to its extensive Bitcoin holdings. The stock dropped by less than 5% after Q1 2024 results and remained stable post-Q4 2023 earnings.
Investors are concerned about the stock’s high valuation, with a market cap exceeding $31 billion against Bitcoin holdings worth $15.8 billion. The company’s core revenue fell from $499.3 million in 2022 to $496 million in 2023.
Another catalyst for MSTR shares is its 10-1 stock split scheduled for August 8, potentially making the stock more accessible to retail traders. Shares often rise ahead of a stock split.
