MSTR stock falls after latest Strategy Bitcoin purchase

MSTR stock price dropped by over 7.3% on Tuesday after Strategy revealed its latest Bitcoin purchase.

Strategy shares tumbled to $161, a few points above the key support level at $149.75, its lowest level this year. It has now dropped by over 70% from its all-time high.

In a statement, Michael Saylor said that the company accumulated 22,305 Bitcoins (BTC) last week. It spent $2.13 billion to fund this purchase, raising the money by selling its common shares. 

Strategy now holds 709,715 coins valued at over $64 billion, and management expects the accumulation to continue. According to the SEC filing, Strategy has room to purchase more Bitcoin due to its large pool of approved shares.

Therefore, the MSTR stock price dropped because of the ongoing Bitcoin price crash, which pushed it below the key support level at $90,000 for the first time in weeks.

Bitcoin dropped amid ongoing geopolitical issues, including President Donald Trump’s threat to impose huge tariffs on European goods. While European officials have sought to de-escalate the issue, they have also warned that they will retaliate, including by triggering the anti-coercion instrument.

Bitcoin’s price also dived due to events in Japan, where government bond yields surged to the highest level in decades. There are signs that the Bank of Japan will continue hiking interest rates to combat inflation and the falling value of the Japanese yen.

These worries explain why the US stock market continued to fall, with the Dow Jones Industrial Average falling by over 550 points and the Nasdaq 100 diving by over 320 points.

The MSTR stock has also cratered as its premium continued falling. Data show that the market capitalization-based net asset value dropped to 0.721, while the enterprise value-based net asset value fell to 0.95.

MSTR stock price technical analysis 

The daily timeframe chart shows that the Strategy stock price has pulled back in the past few months, moving from a high of $456 in July to the current $160.

It has remained below all moving averages, while the Supertrend indicator has remained in the red. 

The stock has also formed a bearish flag pattern, a common continuation sign in technical analysis. 

Therefore, a drop below the key support level at $149 will confirm the bearish outlook and possibly get to the support at $100.