MSTR Stock Follows BTC Price Rally, Gaining 25% In Two Days, What’s Next?

MSTR stock extended its rebound on Friday as Bitcoin climbed to its highest level since May. Strategy shares gained about 9% in premarket trading on Aug. 21 after rallying sharply during the previous two sessions.

Bitcoin traded near $77,484 during the session, up almost 7% on the day and more than 20% for the week. The move pushed BTC back above Strategy’s average acquisition cost and strengthened the company’s Bitcoin treasury position.

Is MSTR Stock Seeing A Short Squeeze?

In the last two trading sessions, Strategy’s MSTR Stock has added $7 billion to the company’s market cap, with 25% surge in this period. Strategy chairman Michael Saylor said, “we have the option to not sell MSTR, and that rips the faces off the shorts.” Basically, he hinted at the company’s ability to withhold shares from the market could contribute to a short squeeze.

MSTR has also surpassed Google’s GOOG in trading volume, becoming the 17th most-traded stock in the U.S. The stock surged more than 11% in pre-market trading to above $125.

According to the supplied data, 12 Wall Street analysts have an average MSTR stock price target of $257. It means an approximately 105% upside from current levels.

This major upside in the MSTR stock comes following a sharp rebound in the Bitcoin price. Over the past week, the BTC price has surged from $62,000 to now at $77,000. Thus, the BTC-proxy bet has been picking up significantly.

MSTR Stock Sees Strong Demand, Reclaims BTC Cost Basis

During the second-quarter this year, more than 17 institutional investors across 8 countries have increased their MSTR stock holdings. Some of the largest buyers included Goldman Sachs, which significantly increased its position.

BlackRock alone added around 1.64 million shares along with other buyers like Capital International Investors, Vanguard, and State Street.

Following the recent 25% upside in BTC price on the weekly chart, Strategy (MSTR) is now sitting on approximately $875 million in unrealized profit on its Bitcoin holdings.

Strategy holds 840,447 BTC at an average purchase price of $75,385 per Bitcoin. If Bitcoin rises to $100,000, Strategy’s unrealized profit would reach approximately $20.7 billion.

With BTC price trading at $75,613, the company has moved back above its cost basis and is sitting on approximately $192 million in unrealized gains, as per official data.

Has BTC Price Rally for Long-Term Just Begun?

The recent Bitcoin price rally has dragged the overall crypto market higher resulting in major short liquidations. Some market players believes that there’s room for further upside in this rally.

Crypto Patel said Bitcoin’s supply dynamics could provide a key signal for the next phase of the market rally. The analyst highlighted Binance’s Bitcoin supply at approximately 3% of total supply, an MVRV ratio of 1.31, and a strengthening Stock-to-Flow (S2F) metric.

Blockchain analytics firm Glassnode said Bitcoin has erased three months of underperformance against the S&P 500 over the past 72 hours. The firm noted that periods of relative Bitcoin underperformance are common. However, when BTC begins to outperform the S&P 500, the excess gains tend to be significant.

This article is for informational purposes only and does not constitute financial advice. Equity and cryptocurrency markets can experience sharp price movements.