Will MSTR’s stock price fall because Strategy’s BTC holdings have unrealized losses of $900 million?

MSTR stock has come under new pressure as Bitcoin has fallen below $75,000 and Strategy’s holdings have been hit with $900 million in unrealized losses.

As Strategy’s Bitcoin unrealized losses widen, investors are considering whether MSTR will fall further or if it is nearing a stabilization point, putting new attention on the company’s stock.

Strategy Inc.’s stock price has fallen about 61% over the past six months and was trading around $149.71 at press time. After rising 4.5% in regular trading on Friday, the stock fell 0.27% in overnight trading on Sunday, showing weakness after months of selling.

Bitcoin’s decline puts pressure on Strategy’s equity exposure

Bitcoin ($BTC) below $ 75,000 pushed Strategy ‘s 712,647. $BTC Based on data tracked by Lookonchain, the holdings are in unrealized losses of more than $900 million. The company’s average purchase price is around $76,038, and its position is slightly underwater following the recent decline in the market.

You may also like: The future of Bitcoin finance depends on strategy, not price. opinion

Although the loss did not materialize, it is important to the strategy because of how closely the company’s stock is tied to the price of Bitcoin. A January filing with the U.S. Securities and Exchange Commission showed that the company continues to rely on an on-market stock sale program, along with other securities issuances, to fund Bitcoin purchases.

This structure is bidirectional. When Bitcoin rises, Strategy’s stock price often rises at a faster pace. If Bitcoin falls, the risk of dilution increases and the stock price could fall even more sharply as investors focus on the number of Bitcoins per share. The recent economic downturn has made this sensitivity even more evident.

Despite the drawdown, Strategy shows no signs of changing course. Founder Michael Saylor has reiterated the company’s long-term commitment to Bitcoin, and analysts say there is no imminent risk of a forced sale given the company’s debt situation.

Will MSTR stock price fall further from here?

Whether Bitcoin can sustain its current levels will play a major role in MSTR’s next move. If Bitcoin’s significant decline re-emerges dilution concerns, it could quickly put new pressure on Strategy’s stock price. But if Bitcoin stabilizes, it could strengthen the stock’s fundamentals after months of decline.

From a technical perspective, MSTR is still in a clear downward trend. The stock is trading below all major moving averages on the daily chart, and the price is near the lower end of the Bollinger Bands.

This indicates that the downward momentum is strong and may be extending. The middle band, located between $165 and $170, still acts as a dynamic resistance.

Although the stock has recovered from oversold conditions, the Relative Strength Index remains below the neutral 50, hovering around 40. This means that although the momentum has not turned bullish, the selling pressure has eased slightly.

The Bollinger Bands are starting to narrow and volatility has also decreased in recent sessions. This increases the likelihood of a sharp move in either direction and often signals a pause in the trend. The price is currently holding a short-term support range between $145 and $150. If the day closes below that range, the stock will likely head toward the low $130s.

The bull market may continue to attract sellers until MSTR is able to regain its mid-band and push the RSI back above neutral. Unless Bitcoin shows a more sustained recovery, Strategy’s stock price is likely to remain volatile, and while there are signs of near-term stabilization, downside risk still exists.

read more: CME Bitcoin futures open with second-largest gap in history at $6.8 million