MSTR Stock: Brace for a Drop to $350 Before a Potential 100% Surge

MicroStrategy’s high-wire act continues as analysts predict a stomach-churning plunge—down to $350—before a possible moonshot rally. The Bitcoin proxy stock faces a classic ’crash before the cash’ scenario, with true believers banking on a 2x rebound.

Wall Street’s crystal ball: First pain, then gain. Just another day in the volatile world of crypto-adjacent plays—where ’fundamentals’ are whatever the latest tweetstorm says they are.

TLDR

• SIR CHARTIST predicts that MSTR stock could drop to $350 before rallying 100% to $700.
• The stock has broken below the 9-day EMA and 20-day SMA, indicating a potential downtrend continuation.
• A high-volume breakdown followed a period of price consolidation, suggesting a major shift in trend.
• The appearance of a reversal candle and heavy intraday selling signals market exhaustion and a bearish outlook.
• Strategy plans to raise $2.1 billion through stock sales to buy more Bitcoin, which will put pressure on the stock.

The MSTR stock faces heightened volatility following a sharp intraday reversal and heavy selling pressure. Market expert SIR CHARTIST has projected a potential drop to $350 before a recovery. He also expects a 100% rebound, which could push the MSTR stock to $700 in the medium term.

Technical Breakdown Suggests Further Weakness in MSTR Stock

The MSTR stock recently broke below key technical levels, including the 9-day EMA and the 20-day SMA. According to SIR CHARTIST, the 9EMA is bearishly converging with the 20SMA, signaling further downside potential. He noted that the trade setup has changed significantly since April.

As someone who trades $MSTR nearly everyday II can say…the probabilities of it being a success day trade to the long side has diminished.

Price is now below the 9ema and the 20sma.

On top of that the 9ema is bearishly converging with the 20sma.

To make things worse, price… pic.twitter.com/3PbltOK4aF

— SIR CHARTIST (@ChartBreakouts) May 24, 2025

Currently, the MSTR is no longer producing consistent upside moves, and its bullish day trading potential has weakened. A major concern is the high-volume breakdown that followed the recent price consolidation. This volume shift confirms a trend change and signals a MOVE away from recent bullish momentum.

Moreover, SIR CHARTIST emphasized the appearance of a reversal candle after the last rally, marking the beginning of a clear downtrend. The MSTR stock also showed signs of exhaustion through high-volume selling and a sharp intraday decline. These developments suggest that the upward trend has lost strength, and a further correction may follow.

MSTR Stock Could Drop Before Rally

SIR CHARTIST highlighted that a drop to $350 could occur before any new bullish move. He is waiting to see a combination of selling exhaustion and increasing volume on green candles. He believes this pattern could signal the bottom and prepare the MSTR for a strong recovery.

The expert also mentioned that the key indicator to monitor in the coming week is trading volume. He explained that volume reflects market sentiment and cannot be ignored. If green volume begins to rise, it could signal accumulation before a rally.

Additionally, crypto analyst Ali Martinez supported this bearish outlook, citing a sell signal from the TD Sequential on the weekly chart. This technical indicator has historically predicted short-term corrections. Thus, the probability of a near-term pullback for MSTR stock appears elevated.

The TD Sequential flashed a sell signal on Strategy $MSTR weekly chart, anticipating a price correction! pic.twitter.com/aHXJWhOiOX

— Ali (@ali_charts) May 22, 2025

MSTR Stock Weakens After Bitcoin Purchase

The MSTR stock faced further pressure as Strategy announced plans to raise $2.1 billion through stock sales. The company intends to use the funds to purchase more Bitcoin, introducing new market dynamics. Such announcements often impact the stock depending on broader crypto market conditions.

Last week, Strategy purchased 7,390 BTC for $764.9 million, leading to a temporary rally above $400. However, that upside was short-lived due to subsequent high-volume selling. The MSTR stock’s reaction to such purchases is no longer as strong as in previous cycles.

SIR CHARTIST urged market watchers to study the past breakout from a sideways channel that resulted in over 100% gains. He explained that MSTR stock has formed a strong multi-month base, which could support another breakout. However, he warned that trend shifts can be sharp and advised caution during the current phase.

The market will now wait to see if Bitcoin-related announcements impact the MSTR stock again. The key focus remains on volume and price structure, which suggest a major move ahead. Until then, the MSTR stock may continue trading lower before a possible reversal.