The MSTR stock price experienced a significant drop of over 7.3% on Tuesday, following Strategy's announcement of its latest Bitcoin acquisition. This downturn occurred as the broader cryptocurrency market faced a decline, with Bitcoin's price falling below a crucial support level.
Strategy shares tumbled to $161, a level just above the key support at $149.75, marking its lowest point this year. The stock has now depreciated by more than 70% from its all-time high.
Strategy's Latest Bitcoin Acquisition
In a formal statement, Michael Saylor revealed that the company acquired 22,305 Bitcoins (BTC) during the past week. This substantial purchase was funded by $2.13 billion raised through the sale of the company's common shares.
Following this acquisition, Strategy's total Bitcoin holdings now amount to 709,715 coins, valued at over $64 billion. The company's management anticipates that this accumulation strategy will continue, as indicated by an SEC filing that shows Strategy has the capacity to purchase more Bitcoin due to a large pool of approved shares.
Market Factors Influencing the Downturn
The decline in the MSTR stock price is closely linked to the ongoing Bitcoin price crash, which has pushed the cryptocurrency below the critical support level of $90,000 for the first time in weeks. This broader market downturn appears to be influenced by several global events.
Bitcoin's price has dropped amidst escalating geopolitical tensions. These include President Donald Trump's expressed intention to impose substantial tariffs on European goods. Despite efforts by European officials to de-escalate the situation, they have also issued warnings of retaliatory measures, including the potential activation of an anti-coercion instrument.
Furthermore, Bitcoin's price has been impacted by events in Japan. Government bond yields in Japan have surged to their highest levels in decades, signaling potential shifts in monetary policy. There are indications that the Bank of Japan may continue to increase interest rates in an effort to combat inflation and the declining value of the Japanese yen.
These global economic concerns have contributed to a broader decline in the US stock market. The Dow Jones Industrial Average fell by over 550 points, and the Nasdaq 100 experienced a dive of more than 320 points.
Technical Analysis of MSTR Stock
The MSTR stock has also cratered as its premium has continued to fall. Data indicates that the market capitalization-based net asset value dropped to 0.721, while the enterprise value-based net asset value decreased to 0.95.
On the daily timeframe chart, the Strategy stock price has shown a pullback over the past few months, declining from a high of $456 in July to its current level of $160. The stock has consistently traded below all its moving averages, and the Supertrend indicator remains in the red.
The stock has also formed a bearish flag pattern, which is a recognized continuation signal in technical analysis. This suggests that a further drop below the key support level at $149 could confirm the bearish outlook, potentially leading the price towards the support level at $100.