- MSTR stock price has dropped below a crucial support level.
- Bitcoin price continued falling and is about to cross the $60k support.
- The falling STRC crash means that it may dilute its shareholders.
The MSTR stock price retreated below a crucial support level, and this crash may accelerate as the STRC crash gains steam. Strategy dropped to a low of $98.40, its lowest level since February 2024. It has dropped by 82% from its all-time high, erasing billions of dollars in value.
MSTR Stock Crashes as Bitcoin Price Retreats
Strategy has dropped sharply in the past few years as Bitcoin continued its strong retreat. BTC dropped to $61,000 and is nearing the year-to-date low of $59,000. This retreat is key, as it means the value of its Bitcoin holdings has continued to fall.
Strategy now holds 847,363 coins worth $51.8 billion today. At the Bitcoin peak of $126,200, these coins would be valued at over $107 billion today. Worse, Bitcoin’s technicals suggest that it has more downside to go.
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It has formed a head-and-shoulders pattern, moved below all moving averages, and is about to invalidate the forming double-bottom pattern. Bitcoin is also about to drop below the 61.8% Fibonacci Retracement level.
Therefore, there is a risk that the coin will plunge to the next psychological level of $50,000. If this happens, it would mean its current Bitcoin holdings would be worth over $42 billion.
Strategy Stock at Risk as STRC Crash Continues
The other major risk facing the MSTR stock price is the ongoing STRC stock retreat. It lost its $100 par level earlier this month and continued its strong downward trend today. It was trading at $84.38, a trend that may continue as investors remain concerned about its future.
The retreat has been driven by the ongoing fear that its dividend payouts may not be sustainable. For one, the data show that Strategy now holds about $1.4 billion in cash, well below its annual dividend coverage of $1.7 billion.
These numbers mean two things. First, the company will need to raise cash by diluting MSTR shareholders. Indeed, in a statement this week, Strategy said it raised its cash assets by $300 million, continuing its dilution trajectory.
The other risk for STRC and its siblings, such as STRK, STRD, and STRF, is that the company may be forced to sell its Bitcoins to cover dividend payouts. If this happens, it will sell its assets at a loss since the average buying price is $64,100.
MSTR Stock Price Technical Analysis
The daily chart shows that the Strategy stock price has been in a strong bearish trend in the past few months. It has dropped below the crucial support level of $98, its lowest level on February 5. This is a major development as it means that bears have prevailed, which may drive it lower in the near term.
Therefore, the stock will likely continue to fall, potentially to the next key support level of $90 or below.
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