Strategy stock jumps 27% this week as Bitcoin tops $79,400

Strategy (MSTR) advanced 7.5% to surpass $120 on Friday, its strongest two-month performance, as Bitcoin topped $79,400, the highest since May.

Market analyst Samson Mow said short sellers who bet against MSTR on prior unrealized losses may now face forced liquidations, adding upward momentum to the stock.

MSTR has gained 27% over five trading sessions since Aug. 17, lifting total crypto market capitalization from $2.1 trillion to $2.5 trillion within days. Ethereum reached $2,400 during the rally, while Coinbase (COIN) advanced 6.81% to $184 and Circle (CRCL) rose 7% to $89.

The move reversed a $10 billion unrealized deficit on Strategy's treasury from June, when Bitcoin fell to $61,000. The firm's 840,447 Bitcoin, acquired at an average $75,653 per coin, now carry unrealized gains of $1.3 billion to $1.6 billion with Bitcoin near $77,200, according to SaylorTracker.

STRC Preferred Shares Approach $100 Par

Strategy's STRC preferred shares rose above $96, their strongest since June, after tumbling below $70 during a summer downturn that raised questions about the company's ability to sustain its roughly 11.5 percent annual dividend. STRC was structured to hold near its $100 par value through a variable monthly dividend. CEO Phong Le has said STRC must recover to the $99-$100 range before Strategy can restart bitcoin purchases, a benchmark now approaching.

Cash Reserves Grow During Bitcoin Purchase Pause

Strategy has refrained from buying Bitcoin for about two months. During the Aug. 10-16 window, the firm sold $333.7 million in MSTR shares without any bitcoin acquisitions, directing $52.4 million to STRC dividends and $132.2 million to STRC buybacks through its Digital Credit Securities Repurchase Program. The company raised its USD reserve to $4.8 billion.

The rally followed a White House meeting on crypto that boosted the policy outlook, while Treasury bond buying pushed long yields down, driving Bitcoin's strongest surge since March. Strive's SATA preferred stock, a comparable bitcoin-linked security, also recovered to $100 on Friday after falling below $84 in late June. TD Cowen challenged MSCI's methodology that could remove Strategy from its ACWI IMI index, calling the proposal arbitrary and targeted at excluding particular issuer categories.

From a technical standpoint, MSTR faces resistance at its 100-day exponential moving average of $122. A sustained break above that level could open a path toward the 200-day EMA at $156, with the relative strength index at 66 indicating continued buyer momentum without overbought conditions. The next test for investors is whether the stock can hold above $120 as Bitcoin consolidates after its sharpest weekly gain since March.

This article is for informational purposes only and does not constitute investment advice.