MicroStrategy’s Market Signals Steepest Downside Risk Since April – Time to Brace?

MicroStrategy’s stock is flashing its most ominous warning since April—just as Bitcoin wobbles near key support levels. The corporate Bitcoin whale’s shares often trade like a leveraged crypto ETF, and right now, the charts scream caution.

Wall Street’s favorite proxy for Bitcoin fever isn’t just sweating—it’s drenched. With the stock’s technicals breaking down, traders are eyeing whether Michael Saylor’s billion-dollar bet faces a reckoning… or just another ‘buy the dip’ opportunity for crypto true believers.

Funny how ‘corporate hedging strategy’ now means going all-in on volatile digital assets—but hey, at least they’re not stuck holding bags of commercial paper like some banks we know.

AI's take

A rising put-call IV spread means that the implied volatility of put options (which profit if the stock price falls) is increasing much faster, or is significantly higher, than the implied volatility of call options (which profit if the stock price rises). This suggests that options traders are willing to pay a much higher premium for downside protection or are betting more aggressively on a decline in MSTR's stock price.It reflects a growing apprehension or outright bearish sentiment among options traders regarding MSTR's future performance over the next year. They are pricing in a higher probability of a significant drop in the stock.

A put option gives the purchaser the right, but not the obligation, to sell the underlying asset, MSTR, at a predetermined price on or before a later date. A put buyer is implicitly bearish on the market, while a call buyer is bullish.

MSTR is the largest publicly listed Bitcoin holder in the world, boasting a coin stash of 628,791 BTC ($74.7 billion). The company has been aggressively buying BTC as a balance sheet asset for five years in a trend-setting move for corporates around the world.

However, its stock price has been struggling lately. MSTR has dropped by over 14% to $292 in two weeks, closing just below the 50-day simple moving average (SMA) on Wednesday.