In this video, we take a close look at the MicroStrategy (MSTR) chart using Elliott Wave principles and key support/resistance levels. Is the stock setting up for a major move — or is a deeper correction still ahead? We examine the bullish and bearish scenarios, highlight the most important technical zones, and discuss what needs to happen next for confirmation. Video by MCO Global US.
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MicroStrategy (MSTR) closed its last full trading session down 9.35% at $94.13, hitting a new two-year low as Bitcoin's drop to $61,000 triggers a broader crypto equities bloodbath. The stock staged a mild 3.00% technical bounce to $96.95 in after-hours trading due to short-covering.
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MicroStrategy Insights Today
1. Funding Model Stress & Preferred Shares Sub-ParThe primary driver of the ongoing capitulation is systemic strain inside MicroStrategy’s STRC preferred stock vehicle. STRC has plummeted to record lows of around $82.50, pushing its effective yield above 11.5%. Because the preferred shares are trading sharply below their $100 par value, the company has been forced to pause new preferred stock issuance, drying up its primary leverage engine.
2. Historic Bitcoin Sales For Dividend CoverageTo meet these mounting dividend obligations, the firm recently executed its first-ever Bitcoin sale, liquidating 32 coins. This has rattled the market and dented the stock’s historical "holding premium" over spot Bitcoin, as investors realize the corporate treasury isn't completely permanent. On-chain analysts like CryptoQuant have actively called for MicroStrategy to pause its aggressive buying to restore its USD cash reserves.
3. Recent Capital AdjustmentsDespite the stress, MicroStrategy disclosed that it padded its cash buffer to $1.4 billion using its At-The-Market (ATM) common stock equity dilution program. The company also bought an additional 520 Bitcoin for $34.9 million (averaging $67,068 per token), pushing its total corporate stash to 847,363 BTC.
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