MicroStrategy and Bitcoin Under Pressure as Wave Structures Signal Further Downside RiskJun 3, 2026

MicroStrategy (MSTR) has experienced a deep retracement from its 2024 highs, declining by more than 80%, which reflects the extreme pessimism now embedded in the market. Typically, such large drawdowns can precede a reversal phase, and so far the structure does show three clear waves down from the peak. However, the subsequent rebound into the 200 area appears corrective rather than impulsive, suggesting it may represent a fourth wave within a broader bearish sequence rather than a trend reversal. If the current flag structure breaks to the downside on a daily close, it would open the door for a potential fifth wave decline toward the 100 level.

Bitcoin is also showing weakness, declining impulsively after a recent ABC corrective recovery. Looking at the daily chart, it looks like wave (C) is already in progress after the recent (B) wave correction, unless wave (B) is going to be larger and more complex. We could see another decline this year. If that happens, the key support remains around the 50k-48k area.

The current structure suggests an extension lower, consistent with a wave (3) of a larger bearish impulse within a five-wave pattern. A break below the 65,000 level would act as a bearish confirmation, increasing the probability of further downside. As long as price remains below the 72,500 invalidation level, the broader setup continues to favor weakness, with a likely wave (5) of 3 following a short-term wave (4) pullback.

Adding to sentiment pressure, MicroStrategy recently sold 32 Bitcoin. While the amount is relatively small in the context of its holdings, it may still carry a psychological impact on market participants given the company’s historically strong association with aggressive Bitcoin accumulation.

Take advantage of our 20 EURO promotion – if you wish to receive updates like this daily https://wavetraders.com/elliott-wave-plans/