A bullish double bottom pattern is emerging on MicroStrategy’s price chart, signaling a potential new bull run and a renewed uptrend.
A bullish technical analysis pattern, contrasting with the one in bitcoin (BTC) that warned of a recent market swoon, is seemingly emerging on bitcoin-holder MicroStrategy’s (MSTR) price chart.
MicroStrategy is a US-based software company specializing in business intelligence, mobile software, and cloud-based analytics.
Founded in 1989 by Michael J. Saylor, the company has evolved to become a leading provider of data analytics solutions for businesses.
MicroStrategy's flagship product, MicroStrategy Analytics, offers real-time analytics and reporting capabilities.
The company has also developed cloud-based platforms, such as 'MicroStrategy Cloud' , for scalable data analysis.
With over 3,000 customers worldwide, MicroStrategy continues to innovate in the field of business intelligence.
The MicroStrategy pattern, a double bottom, comprises two consecutive troughs at about the same price, said to reflect downtrend exhaustion, and a trendline (a so-called neckline) drawn through the high point between them. A move beyond the trendline confirms the breakout, or the bearish-to-bullish trend change.
The Significance of Double Bottoms
That’s especially true when the pattern unfolds after a notable slide, as in MSTR‘s case, and the gap between troughs and the high is at least 10%, according to technical analysis theory. In MSTR‘s case, it’s greater than 35%. A double bottom is considered a bullish reversal pattern, indicating that the downtrend has exhausted itself, and a new uptrend is likely to begin.
MicroStrategy’s Double Bottom
The chart shows a double bottom in MSTR at around $230 since late February with the neckline resistance identified by the early March recovery to $320.94. A price move through that resistance would confirm the double-bottom breakout and signal a renewed bull run.
Technical analysts typically add the gap between troughs and the neckline to the breakout point to derive the potential upside move, which, in this case, means a rally to $410. The share price has also broken through the downtrend line, characterizing the meltdown from the November high of $543.
Comparison with Bitcoin’s Double Top
The evolving double bottom on the MSTR price chart looks like a mirror image of BTC‘s double top. That pattern from early this year that warned of a price sell-off to $75,000. BTC‘s double top breakdown happened on Feb. 24, with prices falling below $91,000, suggesting a bearish trend reversal.
Bitcoin is a decentralized digital currency that operates independently of central banks and governments.
Created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto, it uses cryptography to secure and verify transactions.
Blockchain's underlying technology, allows for peer-to-peer transactions without intermediaries.
As of 2022, over 18 million Bitcoins are in circulation, with a total market capitalization exceeding $1 trillion.
Bitcoin's adoption has been driven by its potential to provide fast, cheap, and secure cross-border payments.
The Potential for Extended Price Rallies
Double bottoms and double tops both have low failure rates, according to CMT books, meaning breakouts and breakdowns usually lead to extended price rallies or sell-offs. MicroStrategy is the world’s largest publicly listed bitcoin holder, boasting a coin stash of 499,096 BTC ($41.5 billion).
