MSTR: What's Going on Next?
$MicroStrategy(MSTR)$ $CME Bitcoin - main 2404(BTCmain)$ The premium paid for the underlying plummeted down to 67% today. Volume came back which has been the only factor here that has caused the premium to decrease or increase substantially. Bulls might be wondering - how can this go down so much? Isn’t it supposed to track bitcoin as a leveraged play? No it’s not.
The premium paid for this relative to its bitcoin holdings is entirely transitory and changes every day. When bitcorn is weak, it falls. When bitcorn is strong it rises. The interesting thing to point out here is that this is exactly how this unfolded during the 2021 fiasco.
It’s tracked it almost precisely. And if it unfolds like it did in 2021, there will be 3 very blood red days to follow. The formulas I use are predicting that the premium will dump into the 50% range tomorrow.
This could happen even If bitcoin stays flat overnight, just like it did in 2021.
PT at $63k bitcoin with a 57% premium is $1248. If bitcoin dumps to $58k the PT is $1150. Trade carefully.[Sad][Sad][Sad]
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