A positive technical analysis pattern is emerging on the price chart of MicroStrategy, contrasting with the bearish signals recently observed in bitcoin (BTC).
This pattern, known as a double bottom, features two successive troughs at similar price levels, indicating that the downtrend may be losing momentum. A trendline, referred to as a neckline, is drawn across the peak between these troughs. If the price surpasses this trendline, it signals a breakout, marking a shift from a bearish to a bullish trend.
This is particularly significant when the pattern appears following a substantial decline, as seen with MicroStrategy, with the distance between the troughs and the peak exceeding 10%—in this case, it’s over 35%.
The chart illustrates a double bottom pattern in MicroStrategy around $230 that has been forming since late February. The neckline resistance was indicated by a recovery to $320.94 in early March.
Should the price break through this resistance level, it would confirm the double-bottom breakout, signaling a potential upward trend. Typically, technical analysts calculate the potential for an upward move by adding the gap between the troughs and the neckline to the breakout point, suggesting a price target of $410.
Additionally, the share price has also moved past the downtrend line established from the November peak of $543.
The double bottom forming on the MicroStrategy chart appears to reflect the opposite of the double top seen in bitcoin earlier this year, which indicated a forthcoming price drop to $75,000.
The breakdown from BTC’s double top occurred on February 24, when prices fell below $91,000, indicating a potential trend reversal to bearish. This decline accelerated in the subsequent days, leading to a low of $76,800 last week. A similar pattern was observed in Wall Street’s tech-heavy Nasdaq index at the beginning of this month.
Both double bottoms and double tops are known for their low failure rates, which suggests that successful breakouts and breakdowns typically result in prolonged price movements, whether upward or downward.
MicroStrategy stands as the largest publicly traded holder of bitcoin, with an impressive collection of 499,096 BTC, valued at approximately $41.5 billion.