MSTR’s 4H Chart Looks Dangerous Right Now

Added: 2026-05-13

[00:00:00]Wednesday, May 6. Bitcoin at 81,250, MSTR at 184.75.

[00:00:06]The theme of this video is negative or bearish RSI divergences. I left myself clues in the chart behind me here. I just want to look at some of the similar divergences to what we're seeing today in MSTR and how they played out. So, I'm going to try to get through this kind of quickly, but we shall see. Uh first let's go all the way back here to I think this is the worst MSTR drop it that it's had in history uh around this time frame. Now what were the clues that you might I don't know I wouldn't say that there was a clue you're going to see a drop of that magnitude but if you look at price up here okay going higher and the RSI had a negative divergence.

[00:00:46]So it may look like price was even flat a little bit but I would say it went a little bit higher. You had the negative RSI divergence and then ultimately it dropped off a cliff from like $19 to$ 1350 in just a day. Basically, it must have been insanely bad earnings or earnings guidance back then. Uh here's another one. It's a little bit more pronounced, I think. So you had price um well number one the RSI is clearly going down as price goes up and the result was a drop off in price um top to bottom was I mean if we just measure the initial draw down and don't extend it out into the future uh but just that initial draw down was you know 16.2%.

[00:01:26]Um, let's look for the next dot. Okay, right here you can kind of see RSI is painting a picture that and this is 4hour chart by the way. So, I'm getting into the minutiae here. We're getting into the lower time frame that I don't normally do. Um, you could say that price was relatively flat while the RSI was telling you, hey, expect a uh reversal, maybe not in the macro trend.

[00:01:46]Like, by the way, we're talking 4hour chart here. I'm not even talking about like the whole macro trend. We can kind of touch on that at the end of the video, but I just want to say that like time frame matters. Like when I talk about a pullback happening, and by the way, not financial advice, not a financial adviser. I own MSTR, I own Bitcoin. I'm just talking about what you might expect in the near future, you know, days to potentially the next week.

[00:02:05]It is tough sometimes to put a well, as I'll show you, by the way, as I'll show you, tough to put an exact time frame on it because there's examples in the past of uh the stuff can go on for a while.

[00:02:14]But, you know, yeah, bearish RSI divergence and price during this period is going higher. Um, the next one I wanted to point out, I I might have missed one along the way here, but uh this right here, and this is after the the big 2021 parabolic move right there after the COVID sell-off, but you can see here that uh RSI is telling us to expect a sell-off. And basically, if you look at So, if I turn off the magnet real quick in Trading View, and let's just zoom in right here. Basically, what you're looking for, guys, is like uh price traded around $64 and then traded higher up to like 69.5. So, price is going up, but the $64 RSI versus the 69.5 RSI uh did not agree, right? And typically that plays out something like that. You know what I mean? The depth of the sell-off is is not known. I don't think it's indicated by the um the the divergence, but it at least kind of clues you in to expect a pullback. Now, that was a pullback of 31.3%.

[00:03:18]And by the way, sometimes it can be at a negative bearish d I can't call it negative divergence. Technically, supposed to be called a bearish divergence. And then it can clear based on pulling the RSI higher on an explosive move higher. So, that is possible if MSTR wants to push up to 206, like I mentioned in yesterday's video. To me, that would be highly logical and clean for the structure.

[00:03:38]However, we'll talk about it. We'll circle back around, but I did look back at the last bare market and um it it and well, yeah, we'll talk about it. Um here's another one. So RSI uh topped right here. Price was $75 and then price put up a higher high. I mean, what's 75 divided by 89? 75. So price pushed up 15 almost 16% higher right here on this bearish divergence. And the result was well that was kind of a clue to expect a sell. And the extent of that was I mean honestly that's pretty tough even if you just go to the first draw down which took you to the 200 day. Uh basically looks like it happened in about 12 trading days and that was a 26% sell-off. Um it looks like there was another one here. Okay. So the RSI top was right here at $30 and the actual top was up here at about almost $36. But you can see here in the RSI again did not agree and that led to a pretty imminent sell-off of 43%.

[00:04:46]Now the next one that I found was pretty easy to spot here. You know higher highs there RSI disagreeing and ultimately let me leave that. Ultimately that led to a sell-off of 40.5%.

[00:05:00]One of the hardest things to tell though, guys, is like when is it uh when is it the candle to short if you wanted to short right now, maybe we can talk about that too because I did go back through in the morning update for my members this morning and talked about the signature of that uh candle to look for. By the way, I've got a group for MSTR and Bitcoin investors where you can copy my trades linked below. Now, here's where it can get real tricky when it comes to these divergences. Check this one out. So the RSI peaked right here at $45.

[00:05:32]Uh the next time that price spiked up was at $5350. Now the RSI was flat there. Then price spiked again to almost $60. All right. And RSI now is very clearly working on this bearish divergence. And then price spiked again at $72.60.

[00:05:52]So remember the RSI topped at $45. And ultimately price topped at 73. So anybody who noted this divergence had their conviction tested um really over the duration. I mean the the the RSI top was October 24th and the actual price top was I mean gez it was the 2nd of January 2024. So I mean that's not even really actionable. Um I mean granted price did pull back along the way. You could say like if you really just wanted to I guess zoom in, you could maybe say that this right here when price went from 45 up to 53, right? Price is doing this and RSI is doing that and that led to an initial selloff of uh 13.8% which isn't I mean this is where it gets tricky because is that even worth um shorting because if you didn't get out at the exact top at 53.3 uh that would have been uh risky let's say. Uh the next one here that I would say was pretty obvious.

[00:06:55]Check this one out. So RSI topped right here with price at 135. Okay, so that's right here. And then the actual price topped here at $21.

[00:07:06]And that led to a sell-off of almost 50% afterwards. Granted, that was in 2024. That was that first quarter parabolic move. And the parabolic moves do tend to end with a negative divergence. So that's one that is pretty consistent and is going to not make it easy to know like like I mean if a move is ending in a parabola you should pretty much expect a negative divergence. Not financial advice but in my in my experience in my opinion um I would expect that. Here's kind of a subtle one. Um price is kind of flat here and the RSI if you look at where price actually topped was this candle right here. So that was the topping candle and you know you can kind of see here what what it thought was coming next and the sell-off there bottom uh top to bottom was 43.5% even though that single daily candle that went down to the 200 day moving average um ended up closing up 26%. So that was one heck of a day. I'm assuming Bitcoin did something crazy that day or maybe it was an earnings day or something like that. Um, all right. Have we done enough of these? Like you guys can kind of get the gist of it, right?

[00:08:16]Like price was flat here, divergence, and it led to a sell-off of uh like 14%.

[00:08:23]This was 457 right here. This was last uh July.

[00:08:28]And if we were able to get above 457, man, like it had the potential to absolutely fly. We were above uh MSTR's super cycle level back then as well. So, we were above this downtrend, which above there, typically price does go parabolic. Um, don't take me at my word.

[00:08:45]I'm just studying the charts. So, you saw that we got a 3.5x move in 8 weeks, a 5.5x move in 22 weeks, and a 10.35x move in 26 weeks. Guys, by the way, anybody wondering, um, this week we would just need to get above about 267 for the bias to be that MSTR is going to begin a parabola. So, anybody that's been excited by the recent price action, I mean, it's great to get excited, but like we haven't even begun. Like, the reason that I'm here doing these YouTube videos, starting a community around this trade is for what begins up here, not what begins down here. I'm not trying to get too cute um down at this level. And if you guys were curious, in case you're a new viewer, Bitcoin has its own equivalent of this chart. And uh the price for Bitcoin currently is up at around about 132,500.

[00:09:32]Okay? So, and again, it's not me putting my own opinion on this. It's just a consistent thing that I noticed. You can predict when Bitcoin goes parabolic. And even if you account for diminishing returns, you would expect at least a 3x move just based on the past. And if you do quick math, guys, uh you would do 132,500* 3. And Bitcoin minimum upside target would be right around 400,000. But guys, in case you haven't seen my rainbow chart, and it's been a while since we opened up the rainbow chart, you can actually predict the top as a function of time. Uh, it's again, so don't take me at my word, these charts, like this is data that everybody has access to.

[00:10:12]The only thing I did that I don't know to be true for sure is basically what I did is I made this level of significance, which actually on that previous chart we were just looking at, it's it's this line right here.

[00:10:23]Um, in order to be consistent with the previous, I call this the rainbow chart, the previous channels, I made it the 25% line where we were basically topping out. And yes, technically last year in July and then again in October, we traded above it. Um, I made that the 25% line. And I basically tried to make this projection as muted as possible. But if that's the 25% line, well, every parabolic top happened at the top of these channels. And what's cool is you just do the math. If that's 25%, then the 50% line, let's say we get there in September 2026, I just made that up, by the way, um is 197,000. The 75% line, if we were to get there in December 2026, is 298,000.

[00:11:03]And the top of the channel, if we get there in March 2027, which actually is in line with my projection based on what I'm seeing using that new methodology that I developed about eight weeks ago that I don't share publicly, is around $440,000 Bitcoin. And there's going to be an insane there's going to be crazy narratives.

[00:11:20]There's going to be crazy bearish divergences along the way. But um my plan is to make truly as close to generational wealth as possible off of this move because these moves are only going to get rare. I interviewed Steven the astrophysicist. He explained and it's actually pretty simple math um how often these parabolic uh parabas these parabolic moves come. And basically we were actually supposed to have it in 2025 if you just go off of the kind of the standard. Granted, he has much more complicated complex models. I'll link to the interviews with Stephen in the link below or in the description below. But um if you just go off of like 2009, then you do plus two to the^ 1 add two years 2011. Yes, it went parabolic in 2011.

[00:11:59]Then 2009, the inception of Bitcoin plus two to the power two add four years 2013. Did we get a parabolic move in 2013? I don't know. Did we? Yeah, we got two. We got one right there and one right there. Okay, what's the next one?

[00:12:11]You add eight years. Well, that takes us to 2017. Did we get parabolic move in 2017, guys? Let me know. Yeah, we did.

[00:12:17]Uh then 2025, you know, we didn't get one, but we did get this big bullish reaccumulation and then we popped out the top and now we're doing a secondary reaccumulation on top of the old one where we spent, you know, five years in, almost five years. And what do you guys think comes next? I don't think you need to be like a you don't have to have a ton of experience doing TA, technical analysis, I think, to um have a bullish bias up here, but again, it's it's I'm just a talking head on a screen. So, you know, whatever you think is best is what you should do. Um, back to MSTR. Sorry, we got off track there. Uh, where we are today. I just buried the lead big time.

[00:12:51]Sorry about that. Look at where we are today. So, RSI topped right here in overbought at an 84.7.

[00:13:01]And since then, uh, RSI very clear bearish divergence while price has in fact, uh, pushed higher. Now, the one thing that I would mention is there is a candle, a type of candle that I would be looking out for, and I think it shows best on the daily, and we haven't really had it yet. I'm looking for more a candle, and it doesn't have to happen this way, but in order for me to feel like this is actionable, I do want to feel confident in the move, which basically the market maker's job is to trick us so that we're not confident in the move or that we're confident in the wrong move. But I'm looking for a candle like this. You know what I mean? I want a candle with a long wick to the upside, uh, a thin body to the downside. And that is what I'm waiting for to potentially, well, actually, you know what? I do share trade alerts with my members, but I I'll feel more confident.

[00:13:54]I'll feel better about opening a potential short position. Uh, upon seeing that, now I do also believe strongly that 206 is potentially in the cards. 206 I mentioned in yesterday's video. There is a bunch of ways of arriving at uh that price. Most notably is going back to the 1999 to 2002 um.com bubble bursting and the 618 fib.

[00:14:21]Okay, so yes, we are referring back to 25 years ago. I know it's crazy, but it actually does really respect these levels in my opinion. The 618 fib is right there at 206 and I believe MSTR wants to be there. You know, I think that the uh the two most critical levels for MSTR in its entire price history, I believe, are like 131 and 333. Um, in my personal opinion, after that, it's probably 545. You could argue that maybe it's something down here, but um I don't really think think so. Uh so 206 is that level that I'm watching to the upside.

[00:14:50]The thing is it can it can really accelerate to the upside if it gets a close above 190, which makes me hesitant to want to uh put my money where my mouth is. And the thing is, you don't really have to, right? you can just trade pristine setups. That should be everybody's goal in my opinion. If you're trading, if you're buying shares and buying bitcoins, like I think we're seeing right now we're we're flipping the moving averages. We're reversing how you would define the trend to be more and more bullish. We're still under the 200 day moving average, but there is a huge pocket of uh of air here between 190 and I mean, I might not have drawn that perfectly. I didn't actually look, but 190 should be up here, roughly there. All right. from 190 up to like 232, guys. So, if you are shorting and then you see a close above 190, it's not financial advice, but I mean, you might be caught on the wrong side of that thing. Um, and don't take me by word.

[00:15:40]Again, just look at the previous price action in this range. There isn't much, right? Like, there's a ton here in this range from you could argue $100 up to 190. And then there's a not maybe a ton, but there's more here from 232 up to 457, right? So, if we get above 457, like I was saying before, expect an explosive move higher. You need that close above. Um, similar here for 190.

[00:16:06]Again, I don't know the future. I'm just showing you what I see. So, Bitcoin uh on the 4hour, guys, is at a little bit of a bearish divergence while price goes higher. Um, if you look, the RSI topped uh right here in this candle that went from 78,000 up to 80K. So right here uh but as price has gone up as high as like 83,000 roughly um the RSI has not been participating. So there is a little bit of a divergence there. And then if we flip this over to the daily time frame uh there's no bearish divergence on the daily RSI. Um this daily candle though is a little bit ugly signaling a potential reversal. Obviously there's still time left in the day. Um the one thing that I would mention though guys is that like that new methodology that I created um roughly two months ago um we're not in a sell signal here on the Bitcoin 4hour or daily chart but it does help us establish a range for the momentum oscillators and it's not just saying like oh overbought oversold etc. um we are overextended and uh I would definitely be in terms of just looking back being being objective being unbiased like when we've been in similar positions that we are in currently as I record this video Thursday May 6th uh at 3:52 p.m. like the the pullback has been looming. If you're irresponsibly long MSTR like I am, how much would it be worth to you to have somebody who's in the charts daily looking for the perfect entry for shares and options and eventually looking to see if we might have topped and it's time to take profits. If this is something that interests you, I want to invite you to check out my MSTR generational wealth community linked below.