Strategy’s stock MSTR printed one of the rarest bullish reversal signals in technical analysis, the “Abandoned Baby,” on its daily chart, hinting that a brutal downtrend may be running out of steam.
Key takeaways
- MSTR’s rare reversal pattern suggests rising odds of a sharp rebound.
- Bitcoin volatility remains the key downside risk.
MSTR daily chart. Source: XHow high can MSTR go after printing the pattern? Let’s examine.
Why is Abandoned Baby turning MSTR bullish?
Abandoned Baby forms after a sharp downtrend and consists of three candles: a long bearish candle, a small indecision candle that gaps lower and a strong bullish candle that gaps higher, leaving the middle candle “abandoned.”
Abandoned Baby pattern illustrated. Source: Trade BrainsAnalyst The Bitcoin Therapist called the pattern “super rare” in an X post on Thursday, adding:
“Studies and big quant firms show it’s one of the most reliable reversal signals available. In simple terms: it’s the market’s version of a unicorn.”
How high can MSTR prices go next?
MSTR charts displayed the Abandoned Baby pattern after witnessing a multimonth downtrend, during which its rates plunged by around 66% from their 2025 peak, reaching $155.61 on Monday.
MSTR daily chart. Source: TradingViewThe stock recovered by around 22.50% from the Monday nadir, helped by a sharp rebound in the Bitcoin (BTC) market amid rising odds of a Federal Reserve rate cut in December.
The macro backdrop strengthened the bullish case for MSTR, with traders pointing to multiple technical confirmations.
Related: Strategy will sell Bitcoin as ‘last resort’ if mNAV drops, capital is unavailable: CEO
On Wednesday, analyst Lark Davis highlighted the appearance of a hammer candle near the lows and an oversold relative strength index (RSI), both of which typically signal seller exhaustion and a shift in risk-reward back to the buyers.
MSTR daily chart. Source: TradingView/Lark DavisOptions trader Brando predicted an “aggressive move back above 200,” and even 280, which is up 50% from current prices, if the prevailing macro and technical conditions persist.
He added:
“MicroStrategy has finally reached a level where the risk-to-reward is starting to lean heavily to the upside. Lots of bearish sentiment surrounding this name lately, which could provide an opportunity when many are scared.”
MSTR weekly chart. Source: TrendSpider/BrandoDan Dolev, analyst at Mizuho Securities, predicted that the MSTR stock price could reach $484.
Downside risks remain if Bitcoin turns volatile again, particularly if spot ETF inflows cool or December rate-cut expectations fade, a setup that would likely hit MSTR harder.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
- #Bitcoin
- #Markets
- #Stocks
- #Tech Analysis
- #Market Analysis
- #MicroStrategy
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