Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Micro Strategy Bubble Mania

Currencies / cryptocurrency May 10, 2024 - 09:57 PM GMT

By: Nadeem_Walayat

Currencies

Micro strategy went nuts Friday ending the session at $1106 which prompted my early Monday Morning Market brief warning that MSTR was primed for a huge pump and dump, so get ones limit orders in place to capitalise on what could turn into an epic first few days of the week, where I imagined we could even reach something like 1296 before the bubble popped. However reality turned out to be even crazier and more volatile.


MSTR pumped all the way to $1360 and more importantly gave us 3 bites at the cherry above $1300. So even if one had not been prepared beforehand for such an epic run MSTR gave us several hours to regroup and enter additional market orders to reduce ones exposure ahead oft the expected dump which to date has seen MSTR trade to a low of $1030, that's a peak to trough drop of near 25%! With likely more downside to come. Once the dust settled my position in MSTR has reduced from 79% invested as of Fridays close to currently stand at 53% invested. it may all look easy in hindsight but definitely not ahead of the event, and neither is it going to be easy going forward as we are going to see huge volatility in response to which all one can do is have one limit orders already in place in attempts to capitalise on such volatility as much as is humanly possible. It is not going to an easy ride but as long as one banks profits as one goes along then folks won't be left staring at the likes of MSTR $300 once the dust settles as I did detect some FOMO kicking in at $1300 with comments such as MSTR could fly to $3000 as it did in 2000 to which I replied "if you think like that you'll still be holding your MSTR when its next trading at $300!"

There is a great deal of FOMO baked into the current MSTR price as I mentioned in Mondays market brief where using a simple metric of MSTR X80 tells you how extreme the current price is. For instance MSTR trading at $1360 equates to discounting a Bitcoin price of $108k! Completely unsustainable and hence my warnings to not get carried away by FOMO as it is not going to last and it didn't!

The BTC divided by MSTR chart illustrates just how extreme the price action had gotten.

BTC / MSTR fair value is 80 so roughly a reading of 90 is CHEAP relative to BTC whilst a reading below 70 is EXPENSIVE, Fridays reading which prompted me to send out the market brief was 57! And the FOMO rally took things to a new extreme of 46! So despite Bitcoin pumping to $69k on Monday MSTR literally fired it's booster rockets through $1200 all the way to $1360 as I commented at the time we are looking at a potential Chernobyl nuclear meltdown! The value as of last close is 60, so MSTR at $1051 is still at an extreme, let alone the after hours quote of $1140.

Even though it is possible for MSTR to have another FOMO driven push higher along with BTC to over $70k, however as Tuesdays dump to $1030 illustrates it would likely prove temporary.

One thing is clear, MSTR will TOP before Bitcoin because it's price will be juiced to far beyond what's rationale.

In terms of how high MSTR could go during this bull market depends on how early MSTR tops BEFORE Bitcoin, so the starting point is to have a target for Bitcoin which as per my October analysis is for a base case of $134k which as the following table illustrates I would expect MSTR to top out long before Bitcoin gets to $134k, probably around $102k at approx $2100 following which many will be puzzled as to why MSTR keeps falling whilst Bitcoin keeps marching higher, given that they had just FOMO 'd into MSTR on break above BTC $100k.


Of course if Bitcoin tops out earlier, say at $100k or later at say $170k then that will obviously play into what MSTR does, thus one needs to keep an eye out on the fair value price for MSTR during the bull market where the greater the deviation against fair value the greater the bubble MSTR will find itself in i.e. at BTC $102k the MSTR bubble price of $2170 would be 70% above fair value. Conversely should MSTR dump below fair value and the Bitcoin bull market was deemed to still be in play then that would present an opportune time to accumulate MSTR as was the case a few weeks ago when MSTR traded below $500, whilst BTC was hovering around $43k.

So do bare in mind that during the next correction MSTR could trade through fair value i.e.BTC / 80 and especially be careful of spikes such as Mondays that reversed the following day by 25%! MSTR is a very volatile stock! as the moon shot to $1360 illustrates, so whatever I imagine it can do it's probably going to out do it both to the UPSIDE AND DOWNSIDE!

This article on how to capitalise on the Crypto Bull Market of 2024 is excerpted from - Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! which was first made available to patrons who support my work. So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $5 per month, this is your very last chance to lock it in now at $5 before it imminently rises to $7 per month for new sign-ups. https://www.patreon.com/Nadeem_Walayat.

Latest analysis -Stocks Correct into Bitcoin Happy Thanks Halving - Earnings Season Buying Opps

And gain access to my exclusive to patron's only content such as the How to Really Get Rich series.

Change the Way You THINK! How to Really Get RICH Guide 2023

Learn to Use the FORCE! How to Really Get Rich Part 2 of 3

The Investing Assets Spectrum - How to Really Get RICH

Here's what you get access to for just $5 per month -

※ Patrons Get FIRST access to all of my In-depth analysis and high probability Trend Forecasts, usually 2 full months before the rest of the world. Notified by Patreon by email as well as posted on this page and I will also send a short message in case the extensive email does not make it to your inbox.

Access to my carefully constructed and maintained AI Tech Stocks Portfolio that is updated on an ongoing basis, that includes on going commentary and a comprehensive spreadsheet that features unique innovations such as the remarkably useful EGF's.

A concise to the point Investing Guide that explains my key strategies and rules

 Regular content on How to Trade & Invest  incorporated into most articles so as to keep patrons eyes on the big picture and net get too sucked into the noise of price swings.

 Access to my comprehensive How to Really Get Rich series of articles, clear concise steps that I will seek to update annually and may also eventually form a Patrons only ebook.

Access to conclusions from my ongoing market studies from a total of over 200 conducted studies over the decades. updated whenever the market poses a question to be answered. Also enjoy the fruits of R&D into machine learning such as the CI18 Crash indicator that correctly called both the pandemic crash (Feb 2020) and the 2022 bear market (Dec 2021) well before the fact.

Join our community where I reply to comments and engage with patrons in discussions.

 I will also keep my Patrons informed of what I am currently working on each month.

 Influence over my analysis schedule.

My objective is to provide on average 2 pieces of in-depth analysis per month and regular interim pieces of analysis as market briefs. So over a 12 month period expect to receive at least 24 pieces of in-depth analysis. Though my focus is on providing quality over quantity as you can see from the extent and depth of my analysis which I deem necessary so as to arrive at that which is the most probable market outcome.

So for immediate access to all my analysis and trend forecasts do consider becoming a Patron by supporting my work for just $5 per month. https://www.patreon.com/Nadeem_Walayat lock it in before it rises to $7 per month for new signup's.

And ensure you are subscribed to my ALWAYS FREE newsletter for my next in-depth analysis.

Your crypto's accumulating analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2023 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in