MicroCloud Hologram, a Chinese Bitcoin treasury company, has moved sideways since May despite the recent crypto market rally.
Summary
- HOLO stock price has remained in a tight range this year, even as Bitcoin jumped.
- MicroCloud Hologram is one of the most shorted Bitcoin treasury companies.
- Wyckoff Theory points to a short-squeeze in the coming months.
MicroCloud (HOLO) stock was trading at $4.35 on Thursday, down over 98% from its year-to-date high. This article explores why the popular meme stock could go parabolic this year.
HOLO stock is cheap
One key reason why the MicroCloud stock price may surge soon is that it appears highly undervalued. The company has a market capitalization of $63 million, despite holding 2,353 Bitcoin (BTC) worth over $272 million.
Notably, MicroCloud carries limited debt. The most recent annual report shows total liabilities of just $4.4 million.
BitcoinTreasuries data shows that the company has a NAV multiple of 0.234, which is much lower than other similar companies. Strategy has a multiple of 1.4, while Metaplanet has a NAV figure of 2.5.
MicroCloud Hologram has a high short interest
Another factor is that many investors are betting against MicroCloud Hologram, with short interest climbing to 35.50%. This is considerably higher than most companies on Wall Street and other Bitcoin treasury firms. For example, MSTR has a short interest of nearly 10%, while MARA Holdings is at 35%.
Historically, highly shorted stocks have been prone to short squeezes. Notable examples include GameStop and AMC.
Bitcoin price could be on the verge of a bullish breakout
Technical indicators suggest that Bitcoin may be approaching a bullish breakout. It has found strong support at the 50-day and 100-day Exponential Moving Averages.
The coin has also formed a break-and-retest pattern, revisiting support at $112,000—its previous all-time high. In addition, Bitcoin has created a bullish flag pattern.
As a result, it could break out toward the psychological resistance level at $125,000. Such a move would likely benefit Bitcoin treasury companies, as the value of their holdings increases.
Wyckoff Theory points to a HOLO share price surge
The daily chart shows that the HOLO stock price has moved into the accumulation phase of the Wyckoff Theory. This pattern is characterized by sideways movements and low volume.
This phase is typically followed by the markup phase, where demand outpaces supply. If this pattern plays out, HOLO could rise to key resistance at $9.90, its highest level in June.
