MicroStrategy Inc (NASDAQ:MSTR) continues its audacious bet on Bitcoin (CRYPTO: BTC), recently purchasing $1.11 billion worth of the cryptocurrency between August and September.

This latest buy brings the company's Bitcoin holdings to a staggering 244,800 coins, now valued at approximately $9.45 billion.

As MicroStrategy increasingly ties its fortunes to the volatile world of Bitcoin, investors are left wondering: Can the stock keep its momentum, or is a correction looming?

MicroStrategy CEO Michael Saylor's commitment to Bitcoin has sent the stock up 96% year-to-date and a whopping 295% over the past year. The company is raising an additional $700 million through convertible bonds to buy more Bitcoin, signaling it's not slowing down anytime soon.

But while the long-term strategy might pay off, the near-term technical picture raises some concerns.

Read Also: MicroStrategy Is 'Aggressive' With 'BTC HODL', Analyst Says, Citing New Bitcoin Buys

Mixed Technical Signals: A Rally Or A Pullback?

Despite the bullish sentiment surrounding MicroStrategy's Bitcoin investments, the technical analysis presents a more cautious outlook.

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• Eight-day and 20-day SMA: MicroStrategy stock is trading above its eight-day and 20-day simple moving averages (SMA) of $130.31 and $132.61, respectively, suggesting short-term bullishness.
• 50-day SMA: However, the stock is still below its 50-day SMA of $142.23, indicating potential medium-term weakness and caution for traders.
• 200-day SMA: On the long-term horizon, MicroStrategy stock remains firmly above its 200-day SMA of $118.16, keeping a positive outlook over the longer term.

Chart created using Benzinga Pro

• MACD: The Moving Average Convergence Divergence (MACD) is currently at a negative 1.90, signaling bearish momentum, which hints that the stock might be losing steam.
• RSI: With a neutral Relative Strength Index (RSI) reading of 52.31, MicroStrategy stock is neither overbought nor oversold, but this level suggests the stock is at a critical turning point.

These mixed signals hint that the stock could be approaching a consolidation phase. Investors may want to be cautious, as momentum indicators show the potential for a pullback.

Risk Worth The Reward?

MicroStrategy first ventured into Bitcoin in 2020, positioning the digital asset as a hedge against inflation. Fast forward to 2024, and Saylor's relentless focus on Bitcoin has turned MicroStrategy into a proxy for the cryptocurrency.

Regulatory uncertainties and Bitcoin's intrinsic volatility remain the primary risks to MicroStrategy's future performance.

Still, with Bitcoin ETFs making the asset class more mainstream, the company could be well-positioned to benefit from broader adoption. Yet, the technical signals suggest the stock may need to regroup before resuming its upward march.

MicroStrategy's continued Bitcoin buying spree has put it at the center of the crypto market's expansion. While the company's long-term bullish outlook on Bitcoin remains intact, short-term technical signals suggest a possible slowdown in MicroStrategy's stock rally.

• If You Invested 1% Of Your Portfolio Into Bitcoin In 2019 When Tom Lee Told You To, Here's How Big Its Share Would Be Now

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