Strategy (MSTR) Stock Rockets On Bitcoin Comeback Rally

Strategy Inc Class A (NASDAQ:MSTR) jumped Wednesday as Bitcoin's (CRYPTO: BTC) rebound lifted shares of the world's largest corporate Bitcoin holder. Here’s what investors need to know.

• Strategy stock is charging ahead with explosive momentum. What’s behind MSTR gains?

ETF Inflows Fuel Bitcoin Rally

Bitcoin is up approximately 7% to $69,500 Wednesday afternoon, helped by renewed ETF inflows and improving risk appetite.

The move higher matters enormously for MicroStrategy, whose core analytics business now sits atop a multibillion-dollar Bitcoin trove financed largely with long-term debt.

When Bitcoin rises, the market value of those coins climbs while the company's liabilities stay mostly fixed, effectively turning MicroStrategy's equity into a leveraged Bitcoin vehicle.

Heavy Short Interest Fuels Volatility

The dynamic is being supercharged by positioning. MicroStrategy recently became the most shorted large-cap stock in the U.S., with roughly 14% of its freely traded shares sold short after the stock slumped more than 60% over the past six months and sat on nearly $7 billion of unrealized Bitcoin losses.

That left bears off-side when Bitcoin's slide showed signs of bottoming and Wall Street strategist Tom Lee on Tuesday flagged the crowded short as a contrarian bullish signal. Rising Bitcoin prices now force skeptics to buy shares back, amplifying each leg higher.

With analysts' latest ratings skewing bullish and average price targets running well above recent trading levels, MicroStrategy has reclaimed its role as the market's highest-beta bet on a Bitcoin recovery amid Wednesday’s surge.

RSI Signals Neutral Momentum Setup

Currently, the stock is trading 9.8% below its 100-day simple moving average (SMA), which suggests some weakness in the longer-term trend. Over the past 12 months, shares have decreased significantly and are currently positioned closer to their 52-week lows than highs.

The RSI is at 44.45, which is considered neutral territory, indicating that the stock is neither overbought nor oversold at this time. Meanwhile, MACD is at 0.15, below its signal line at 0.22, indicating bearish pressure on the stock.

The combination of neutral RSI and bearish MACD suggests mixed momentum.

• Key Resistance: $155.00
• Key Support: $100.00

MSTR Shares Surge Wednesday Afternoon

MSTR Price Action: Strategy shares were up 10.32% at $137.47 at the time of publication on Wednesday, according to Benzinga Pro data.

Image: Shutterstock