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A hidden gem to add to your watchlist

Feb 4, 2025

Hey Trader,

Before diving into the details of MicroStrategy, let’s check out a few key indicators first and a quite interesting intro…

MVRV Z-Score: A Quick Guide

The MVRV Z-Score helps identify when Bitcoin is overvalued or undervalued based on blockchain data. It uses three key metrics:

Market Value (Black Line) – Bitcoin’s market cap (price × circulating supply).

Realized Value (Blue Line) – The average price of all Bitcoins at their last movement, offering a long-term fair value estimate.

Z-Score (Orange Line) – A standard deviation test highlighting extreme differences between market and realized value.

How It Works

When the Z-score enters the pink zone, Bitcoin is likely overvalued (potential market top).

When it dips into the green zone, Bitcoin is likely undervalued (strong buy opportunity).

Bitcoin Price Prediction

Historically, the MVRV Z-Score has accurately signaled market tops and bottoms within two weeks, making it a valuable tool for traders anticipating price reversals.

Global Liquidity: A Quick Overview

Global Liquidity refers to the total money supply available in the world economy, often measured by the M2 money supply—which includes cash, checking/savings deposits, money market accounts, and short-term time deposits.

How Global M2 is Calculated

In addition to M2, Look Into Bitcoin incorporates Federal Reserve liabilities and Overnight Reverse Repurchase Agreements, providing a more comprehensive view of financial liquidity. Key central banks tracked include:

USA (Federal Reserve)

China (People’s Bank of China)

EU (European Central Bank)

UK (Bank of England)

Japan, Canada, Russia, Australia

Why Global Liquidity Matters

Rising Global Liquidity = Central Banks are injecting more money into the system, usually through lower interest rates or quantitative easing (buying government bonds and securities).

Impact on Bitcoin: Increased liquidity often boosts demand for risk assets like Bitcoin, historically aligning with bull markets.

Tracking Global Liquidity trends can help investors anticipate Bitcoin price movements and market cycles. 🚀

Pi Cycle Top Indicator: A Quick Overview

The Pi Cycle Top Indicator has accurately predicted Bitcoin’s market cycle peaks within 3 days by tracking two key moving averages:

111-day moving average (111DMA)

350-day moving average (350DMA) x 2

How It Works

When the 111DMA crosses above the 350DMA x 2, Bitcoin has historically reached a market top. This pattern has aligned with major Bitcoin peaks in past cycles, highlighting Bitcoin’s cyclical nature.

Using This for Bitcoin Price Prediction

This indicator signals when Bitcoin is overheated, making it a useful tool for identifying potential sell points. However, with Bitcoin’s ETF adoption and integration into traditional finance, its future accuracy may decline.

Bitcoin Dominance

Bitcoin Dominance (BTC.D) measures Bitcoin’s market capitalization as a percentage of the total cryptocurrency market cap. It tells us how much of the crypto market is made up of Bitcoin compared to all other altcoins combined.

Why Does It Matter?

Bitcoin Dominance helps traders gauge market sentiment:

✅ High BTC Dominance (e.g., 50%+) – Bitcoin is leading the market, often during bear markets or periods of risk aversion.

✅ Low BTC Dominance (e.g., below 40%) – Altcoins are thriving, typically in bull markets when investors seek higher-risk, high-reward plays.

How It’s Used in Trading 📊

Rising BTC Dominance → Money is flowing into Bitcoin, meaning altcoins may struggle.

Falling BTC Dominance → Altcoins are gaining ground, signaling an "altcoin season."

Bitcoin Dominance is a key indicator to watch when deciding whether to bet on BTC or go hunting for altcoin gems! 🚀

MicroStrategy

MicroStrategy (NASDAQ: MSTR) is a business intelligence (BI) company that provides software solutions to help organizations analyze big data and make data-driven decisions. Founded in 1989, it originally focused on analytics, but in recent years, the company has become notorious for its Bitcoin strategy under CEO Michael Saylor.

So, Saylor basically found a sneaky way to mask his actual business downhill ride by chasing Bitcoin, turning it into one of the most valuable companies on paper—because nothing says “innovative” like riding the crypto rollercoaster to the moon!

Anyway…

So, you want to invest in Bitcoin, but the fees make you cry, wallets seem like a tech puzzle, and ETFs feel like paying for bottled water when there’s a free tap? We get it. Enter MicroStrategy (MSTR)—the stock that lets you ride the Bitcoin wave without the headaches.

Why MicroStrategy Over ETFs or Direct Bitcoin?

✅ No ETF Fees – Keep more of your gains instead of paying fund managers.

✅ Easier to Trade – Buy and sell like any regular stock—no wallets, no keys, no stress.

✅ Extra Leverage – MSTR holds more Bitcoin per share value than an ETF, meaning bigger potential upside.

✅ Corporate Strategy – Unlike ETFs, MicroStrategy actively leverages its Bitcoin holdings to maximize returns.

Basically, it’s Bitcoin exposure without the friction—because investing should be exciting, not exhausting. 🚀

Michael Saylor has used aggressive financial engineering to turn MicroStrategy (MSTR) into a leveraged Bitcoin play. Here’s how he did it:

1. Convertible & Senior Secured Debt Issuance (Borrowing to Buy Bitcoin)

Instead of buying Bitcoin with company cash alone, Saylor issued billions in debt (mostly convertible notes) at ultra-low interest rates to buy more BTC.

Why? The idea was that Bitcoin’s appreciation would far outpace the debt interest.

Example: In 2021, MicroStrategy raised $1.05 billion at 0% interest due in 2027—essentially free money.

2. Leveraging Equity (Selling Stock to Buy More Bitcoin)

MSTR has issued additional shares through at-the-market (ATM) offerings, raising capital to buy even more BTC.

Example: In 2023, MicroStrategy raised over $600 million through stock sales to keep adding to its Bitcoin holdings.

Effect: This dilutes existing shareholders but increases the company’s Bitcoin per share.

3. Using Bitcoin as Collateral for Loans

MicroStrategy doesn’t just hold Bitcoin—it borrows against it to buy even more.

Example: In 2022, MSTR took a $205 million loan from Silvergate Bank using Bitcoin as collateral.

Risk: If Bitcoin crashes, the company faces margin calls, but Saylor remains confident in BTC’s long-term value.

4. Corporate Treasury Transformation

MicroStrategy shifted from a software analytics company to effectively a Bitcoin-holding company with software on the side.

Effect: It became a stock market proxy for Bitcoin, often moving more aggressively than BTC itself.

The Genius (and Risk) Behind It

Upside: If Bitcoin keeps rising, MSTR massively outperforms ETFs & direct BTC holdings due to leverage.

Downside: If Bitcoin tanks, the company faces serious financial strain, debt obligations, and potential margin calls.

Saylor essentially turned MicroStrategy into a leveraged Bitcoin ETF—without the management fees. 🚀

This is definitely not financial advice—I'm just here to make things interesting! Do your own research, or roll the dice if you’re feeling lucky! 😎

Is it a good buy right now? Is it not? Is Saylor a magician? is he a genius? Who knows! History will tell..

There’s a bunch of rumors and ads everywhere, which could mean we’re at the peak of the bull run—and all those fancy indicators might as well be fortune cookies. Or, maybe we’re just taking a breather before blasting off to new highs. The crystal ball’s cloudy... so the choice is yours! 😎

Until next time

TKR