Should Investors Buy MSTR Stock As Strategy Cash Reserves Decline?

Key Insights:

• Amid the MSTR stock rally and the Strategy’s Bitcoin purchases, some investors raised concerns over the company’s depleting cash position.
• The MSTR stock has entered overbought territory with RSI in the 70s, signaling a possible short term pullback.
• Long term outlook remains bullish, supported by strong Wall Street ratings and potential upside if Bitcoin moves to $150,000.

MSTR stock has been on investors radar following Strategy’s latest purchase of 34,164 BTC on April 20. From the lows of $120 in early April 2026, the stock is already up more than 40%, and is currently trading at $140.

However, market analysts point out that Strategy’s reserve cash is depleting fast which could be a bit of concern.

MSTR Stock: What Lies Ahead for Investors?

Following a sharp correction in 2025, and the first quarter of 2026, MSTR stock has given sharp recovery in April. It gained 40% from the bottom.

Strategy turned investors’ heads with its massive Bitcoin purchase. The firm bought 34,164 BTC on Monday, April 20, marking its second-largest acquisition.

Strategy’s latest BTC purchase of $2.176 billion came through the issuance of 21.8 million STRC shares. Moreover, an additional $366 million generated from MSTR stock sales to complete the purchase.

The Street celebrated the purchase as the MSTR stock inched 2.5% higher on April 20, closing at $170. However, some market analysts have raised concerns over the depleting cash reserves of Strategy.

Popular analyst Ted Pillows noted that Strategy is seeing a reduction in its cash reserves. This could impact its ability to sustain dividend coverage.

According to the analyst, the company had sufficient cash to cover approximately 24 months of dividend obligations two weeks ago. That figure has now declined to around 18 months.

Ted Pillows noted that if the trend continues, MicroStrategy may need to issue additional MicroStrategy shares to raise capital. This could eventually lead to shareholder dilution, and could be a concern for investors.

MSTR Stock Shows Overbought Signals Despite BTC Price Rally

Analysts at Barchat noted that the MSTR stock has entered the overbought territory. Its relative strength index (RSI) surged into the low 70s. Investors increasingly use the stock as a leveraged proxy for Bitcoin exposure.

The analysts added that the elevated RSI suggests the stock could face a near term pullback following its recent rally. Despite the gains, MicroStrategy shares remain nearly 8 percent below their year to date high.

The recent strength in Bitcoin has led to estimated $1.3 billion unrealized gain for the company. As the largest corporate holder of Bitcoin, MicroStrategy’s valuation remains closely tied to BTC price movements.

From a technical standpoint, the MSTR stock has broken above key moving averages. This has reinforced the bullish momentum and attracts further institutional interest.

What Should Strategy Investors Do?

Being a direct BTC exposure play, the MSTR stock remains a closely watched investment for 2026. Bernstein analyst have already given a $150,000 year end price target for Bitcoin.

If BTC were to double from current levels, it could significantly benefit MicroStrategy, given its large holdings on the balance sheet.

In the near term, the company’s upcoming earnings release in early May could act as a key catalyst. Strategy is expected to report a loss of $2.04 per share, representing an 87 percent improvement compared to the previous year.

Wall Street sentiment remains strongly positive. According to Barchart, MicroStrategy holds a “Strong Buy” consensus rating, with an average price target of around $359. This implies potential upside of more than 115 percent from current levels.

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