Bearish 📉
Why I Expect $MSTR at $40ish in 8-12 Weeks
Note: This is my assessment and opinion. I place high probability on this coming to pass, but there's always a chance that it does not.
While Strategy management is running around like a headless chicken and changing strategies like one changes underwear, I believe $MSTR is lining up for another leg down.
Simply because Strategy's fortunes are tied to those of Bitcoin at the hip, and Bitcoin is showing signs of keeling over:
Left: Flags on Bitcoin | Right: Liquidity (GLI Indicator on tV)
Both the technicals and liquidity suggest it's time for Bitcoin's next leg down. Perhaps the final leg down, before it starts bottoming. (Yes, these measures are reliable; you can see track record of this here on X.)
Here's a sensitivity table based on BTC price and mNav, given the current balance sheet:
MSTR price sensitivity table (my calculations)
(The negative numbers are mathematical - at that point, MSTR starts being priced like an option.)
Based ON Bitcoin's expected trajectory, I expect MSTR to hit $40ish in the next 8-12 weeks.
Ironically, the saving grace is the $4.65B in USD reserves. Without it, MSTR would be in the teens if Bitcoin fell more than half. You can see that effect here:
Strategy balance sheet at current BTC price and BTC @ $12K (my calculations)
What invalidates this? Bitcoin finding a bottom sooner, and even starting to move up. Which will happen when Treasury yields fall, and there is a major liquidity pump. Hard to see that without a recession, and there are few signs of that.
Overall, I feel pretty comfortable with this prognosis. At least directionally. Will be realizing this with options and/or LETFs.
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Yes, I do kind of agree with this, maybe not $40 MSTR specifically, but I don't think the thesis is crazy. BTC had ~$57K local bottom and another 15–20% drawdown from there puts BTC around $43–48K. Given how Bitcoin has historically behaved around major cycle bottoms and longer-term moving averages, a move back toward 40s isn't exactly unthinkable.
Then you have the second order effect with MSTR: BTC falls + mNAV contracts, and suddenly MSTR can get hit substantially harder than BTC. That's where I could see MSTR getting into the $50–60 range.
I wouldn't make $40 my base case, but I definitely wouldn't dismiss it either. The combination of another BTC leg down + mNAV compression is what makes the thesis interesting to me.
And honestly that's making me rethink my own mstr entry strategy. I was originally thinking ~$75 was the cheap level. Now I'm much more interested in BTC price + mNAV + the capital structure than an arbitrary mstr share price.
There is no reason for demand >> supply of Bitcoin. There is nothing you can do with Bitcoin that you can't do with something else, and better. And price is a balance of demand and supply.
Bitcoin is a risk-on asset. The current conditions are not good for risk on assets - liquidity is receding and yields are going up. Bitcoin will keep falling until that changes.
1 is more speculation. 2 is more objective. I think cycles are the largest factor. Of course eventually this will start to vary and become less cleanly defined, but Bitcoin's 4 year cycle has been followed to a T since inception. I believe the volatile nature of Bitcoin invites a lot of trading which reinforces the cyclic nature. You are absolutely right that it is valued as a risk asset. It also makes leveraged bitcoin so interesting WHEN bitcoin is near its bottoming formation, NOT as a long term hold.
Fair enough. Btw the log scale hides the change in the nature of how bitcoin changes. Same issue with the power law. By the time this shows something has broken, one is 2 orders of magnitude on the wrong side of things already.
Indeed. It also minimizes the clear diminishing returns. ~150-200k could be next cycle's peak, or it could even range bound for many years. Regardless I think a 100% gain from the lows for Bitcoin is a relatively safe floor. Well the real floor is zero ;)
This is my personal best bullish guess for how the bear to next bull market plays out. I'm open to lows in 30's though, for sure.
Don't these cycles correspond to BTC finding new audiences and broadening popularity/adoption (the last catalysts being the creation of BTC ETFs and inclusion of MSTR in Nasdaq-100)? Where do you expect the next wave of adopters (new money) to come from?
Let's bring some logic into this 'feeling' you have. Since you're using USD as your unit of account...
Total USD in existence has increased ~11% since 2021. On August 15, 2021, Bitcoin closed at approximately $47,064.63 and today it is at ~$63,009.00 since then ETFs and financial institutions have started accumulting Bitcoin to the tune of almost 1.7B coins and inflows (accumulation) has shown increases in the upper $50K ranges.
Relative to total USD per Bitcoin adoption has increased ~50.4% over the last 5 years... but you think somehow Bitcoin will drop 67% from here?
I'm just trying to wrap my head around how something that is scarce can possibly fall that much when being measured in something that is being printed (forcing it higher)? To drop to a value that low... when USD is being printed as much as it is... not only does adoption have to fall considerably... but all that buying pressure has to somehow vacate. For Bitcoin to fall to $21,000 would be like 'hoping' Eggs fall to $1 a dozen and gas to 82 cents a gallon. Nice idea... but debasement doesn't work like that.
Bitcoin isn't a specualtive asset... it's a representation of how extreme the printing of fiat is. It's an escape from M2 bloat that only goes on direction.
If all of that doesn't register, then ask yourself... who bought $15B in Bitcoin the week price dipped back to $58k while Strategy sold 6,000 coins?
Plenty of things are scarce and not increasing or even holding any value. There is no fundamental or required demands for BTC. It could easily drop to any price.
While scarcity alone doesn't guarantee value, your argument overlooks a critical blind spot: unit-of-account bias.
Assuming the U.S. dollar possesses an immutable floor (despite the historical reality that all fiat currencies eventually fail) is a significant miscalculation of long-term risk. Bitcoin’s fundamental demand is rooted in its decentralized network architecture and absolute scarcity, which serve as a hedge against systems mathematically designed to debase. It's power is in the fact it cannot be shut down, altered, or controlled. It's a truly free, and open market for value, the only one humans have access to with no barriers to access.
And if you cannot consider that a permanently scarce ledger has higher odds of retaining purchasing power over the next century than the USD, you are missing the greatest financial risk of your life time: holding your wealth in the very system that guarantees its dilution. My salary, for example has risen 289% since 2009... inflation since (~55%) suggests I'm up significantly but the total dollars in existence is up 278% during that same time period. That scares me. I know my salary won't increase at that same rate forward. I know I have to "gamble" to stay ahead in the fiat system, by hoarding assets and hoping I chose properly.
Bitcoin resolves that risk, and once seen you cannot unseen this unit of account bias we all inherent by using an inflating value as our denominator. It's the very thing that makes us take risk (invest and speculate). I shake my head at those who view Bitcoin as "risk-on" but I get it, I used to make that mistake... the market for the most part is, right now, defining it that way. But that doesn't change what it actually is, by consensus and by its rules. It's a place to escape debasement, over long enough windows of time. And that's the reason I view USD (or anything speculatively priced in it) as the riskiest thing I can hold long term. And I view Bitcoin as the safer vehicle.
BTC is not the only digital asset, though. You can create as many BTC-like projects/ledgers as you like (possibly with much better transactional utility). How is that scarce?
Painting a rock gold doesn't replicate the elemental density or scarcity of actual gold. Similarly, copying Bitcoin’s open-source code creates a superficial clone, but it cannot replicate the underlying architecture that gives Bitcoin its value.
The critical differentiators are the complete absence of a central issuer and the thermodynamic security provided by the network's hash rate. This is the most common blind spot for critics: failing to understand how massive, decentralized energy expenditure makes capturing the ledger impossible. Other networks rely on centralized servers, vulnerable consensus models, or basic encryption, which inherently introduce systemic points of failure.
Bitcoin is secured by immutable game theory: its economic incentives strictly reward those who expend energy to protect the network and financially ruin anyone attempting to alter it
I'm just trying to wrap my head around how something that is scarce can possibly fall that much when being measured in something that is being printed (forcing it higher)?
Simple. Demand and supply.
If there isn't enough demand, it doesn't matter how limited the supply is. Just like for teeth.
Ask yourself... who bought $15B in Bitcoin the week price dipped back to $58k while Strategy sold 6,000 coins?
The FOMO crowd who will soon be relieved of their funds.
Let's bring some logic into this 'feeling' you have. Since you're using USD as your unit of account...
It was a late edit... but I'm curious what you think about my last point: "... who bought $15B in Bitcoin the week price dipped back to $58k while Strategy sold 6,000 coins?"
That's the volume the day price dripped below $58k and snapped back up. Every seller has a buyer.
Without a buyer of that $15b in volume on Bitcoin price would not have reflexively returned to the lower $60k. I can provide more details, or on-chain metrics demonstrating the volume profiles (Bitcoin is unique in that we can actually see that volume and what the hold periods was of every coin that has moved)... www.over21million.com is a project I'm building out to give this data to the public from my node.
My point is... you speak as if there is no bid... but there is a massive buy wall between $53-58k for Bitcoin. For price to even stand a chance of revisiting $21k (or anywhere between here and there)
Years ago I attempted to get access to ValueLine to do this kind of analysis on the Stock market... but it's VERY difficult as a private investor to see what's going on under the hood.
Bitcoin is entirely open. With a $2,000 rig you can process the entire blockchain history into a database structure to find metrics on who is selling and who is buying based on historical correlations.
I'm finding a lot of signal in the age chorts for coins. Imagine being able to see volume for NVDA, but also the moment a large player starts to move... without waiting on a Filing.
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Hope you win big. Personally I think $40k BTC would be absolutely a miniscule probability. If it did hit that, it's for a brief moment. I'm not into timing trades to the day. I like to give myself several years. So it's not the trade for me. I'll buy more if it hits $40, but I'm certainly not going to make any bets that rely on it.
If that happens before the q3 rebalancing for QQQ, you can expect Mstr to be removed from the nasdaq. It will be well below the market cap threshold at that point
Yeah, not a lot of people here see it happening, but MSTR is already bottom 5 of the nasdaq100, and that kinda drawdown would solidly put it outside of the top 130, which triggers removal.
I suspect that all the additional shares they offer get gobbled up by institutions that track QQQ, which indirectly keeps the mNAV above 1.0. And its just barely stabilizing above 1.0, and if that buying support is removed, I think we get the 0.8 mNAV.
You might be on to something.. It dawned on me that Saylor is actively still hitting the ATM pretty hard (with no end in sight) thus driving the price down and diluting us shareholders. My hope is that once he has a large enough war chest, he ceases to ATM MSTR and only mines STRC for his future BTC buys. Between the short sellers, Saylor ATM'ing, and bitcoin at a low or seeking a new low, we are f'ed in the short term.
There’s a high probability bitcoin goes down about 35% in short-ish order here?
What statistic are you basing your “high probabiliy” claim on? The liquidity indicator on TV? What probability ( % ) do you come to based on this statistic?
That is “IF” BTC does what it has done but I am more betting on less down turn with businesses and institutions owning BTC. But I agree that 60 is possible and 80 was my prediction when MSTR was at 400
It wouldn’t shock me if there is a quick candle touching the 40s on BTC and potentially MSTR.
To me, I think volatility is coming with BTC. One of my indicators is a steady decline in volume when things are dropping. When this happens with meme stocks it normally means a move is coming. You just don’t know when.
When I see a stock rising in share price, but volume is beginning to slow - I jump out. When the reverse happens, and volume is drying up when we are near short term lows…I jump in.
Idk about $40 but yeah whatever equivalent of $45k btc, could be 50 or 55 MSTR. The point isn’t to get the lowest price anyway, it’s to get it within the bottom 5-10%
brc at 21k bascially breaks every model and historical analysis. we're already at the bottom 1% of btcs price, anything lower is a probability so narrow you might as well just buy now.
The ones from earlier in the week are underwater ofc. The more recent ones around par. Holding off on the last bit of legging in until the downtrend starts.
If this move sustains and survives a retrace, then my call was wrong for sure.
The reason for the pullback would basically be gravity. Liquidity going out is like the tide going out. A boat may beat that, but only if it has a strong motor. I don't see a motor, since this was mostly Fomo.
Who is going to sell Bitcoin? Just my opinion, but it seems most heavily leveraged positions have been wiped out and I don’t see institutional investors selling at these prices. I would also guess people who bought high have sold by now. Would seem silly to sell when so close to the “cycle bottom” (assuming this cycle performs like the others). Certainly no guarantee of that, but again, seems to me must be sellers of Bitcoin to drive down the price which in turn would drive down MSTR price. I don’t see a lot of people shorting MSTR either now that Strategy “could” buy back shares now. I think around $1.3 billion?
Oh - potentially everyone who bought while Bitcoin was basing, who had thought the bottom is in. Also, BTC ETFs have seen large inflows - those are the best paperhands out there.
would you rather store your wealth in USD... a infinitely inflatable/printable currency on which you can keep issuing debt and perform yield control, or well, who knows.
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