MicroStrategy, known for its significant foray into Bitcoin holdings, has seen a meteoric 320% surge in its shares throughout 2023. However, cautionary flags have been raised by experts at 10x Research, signaling a potential slowdown and anticipating a notable correction in MicroStrategy’s stock price.
According to the analysts, the position appears overinflated by approximately 26%, derived from a regression model that tracks the correlation between MicroStrategy and Bitcoin (BTC).
The ascent of MicroStrategy’s stock price from $141 to $670.71 since the year’s commencement underscores its remarkable growth. In the last month alone, the stock surged by over 32%, contributing to an astonishing 319.19% year-long increase, as reported by TradingView.
This surge is notably linked to MicroStrategy’s strategic purchase of an additional 14,620 BTC in 2023, which consequently propelled the company’s unrealized profits to a staggering $2.2 billion. The upsurge in Bitcoin’s price by 160% since the year’s onset, reaching considerable multi-month highs, has added to this excitement. Anticipation surrounding the possible approval of spot Bitcoin ETFs and the impending halving event, systematically diminishing the available Bitcoin supply for miners, has fueled this fervor.
However, the prediction of a potential correction in MicroStrategy’s shares, suggested by the 10x Research team, hints at a looming shift in the market sentiment, signaling a cautious outlook amid the company’s exponential growth tied to its significant Bitcoin holdings.
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