Strategy (MSTR) shares surged over the past few trading sessions as the company recovered its huge crypto holdings to the unrealized profitability zone amid a Bitcoin price rally above $78,000. The stock has risen around 23% in the last five trading sessions, reaching its highest level in three months and briefly topped the $170 mark.
At the press time, Bitcoin trades at $78,051 with 2% increase in the last 24 hours.
The rally comes after Bitcoin reclaimed the $78,000 range, gaining 5.24% in the last 7 days. This price is crucial for Strategy as its average BTC buying price is near $75,500 per coin.
The balance sheet of the company is volatile as it depends on the Bitcoin price, which increases both the positive and negative factors.
According to a Monday filing, Michael Saylor’s Strategy added 34,164 bitcoin to its treasury at an average price of about $74,395 per coin, worth around $2.54 billion.
The acquisition takes the company’s total holdings to 815,061 BTC, valued at approximately $61.56 billion at an average cost of $75,527 per coin. After this purchase Strategy officially surpassed BlackRock’s IBIT as the largest Bitcoin holder.
The acquisition was made and financed by capital raised by an equity offering and financing instruments. The company also reported a notable rise in Bitcoin-related profits; estimates show an increase in BTC profits by 82% in a week.
This aggressive accumulation strategy has made Strategy a proxy of institutional exposure to Bitcoin, appealing to both bulls and skeptics worried about concentration risk.
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MSTR stock price has formed a double bottom pattern, which indicates an uptrend that may push the price higher. The stock has now crossed the pattern’s neckline resistance, signalling that the rally will likely continue.
As the price moves higher, this previous resistance at $152 will serve as strong support. In this double bottom pattern, the price of MSTR stock surged by 31% from the support of the two bottoms at $114 to the neckline.
This means that from the resistance, the stock could register a surge of 31% that could push it to $201.
The RSI has been rising with higher highs and now sits at 66. If the stock is in a strong bull market, it is possible that the price will continue rising alongside the RSI. As long as this RSI is not above the overbought levels of 80, there is room for MSTR to surge.
Institutional investors also remain active. Recently, $3.3 trillion American Funds Fundamental Investors (ANCFX) revealed an acquisition of 4.32 million MSTR shares worth $747 million. The company now holds 10.33 million shares valued at $1.78 billion.
In the future, the performance of the strategy is going to be highly dependent on Bitcoin price trends and macroeconomic factors. Continued trading at high levels, especially around the levels of $76,000-$78,000, may help strengthen the bullish outlook and contribute to additional gains.
But a major risk is volatility. As one of the most leveraged corporate investments in Bitcoin, Strategy will probably keep on tracking the crypto market cycles, as it is both a high-reward and a high-risk investment.