Strategy Inc. continues to expand its Bitcoin treasury, yet shareholders are heading for the exits in growing numbers. The company’s stock is experiencing a severe downturn even as the cryptocurrency it accumulates reaches unprecedented price levels. Over the past month alone, the equity has shed more than 20% of its value, erasing over half of its peak market capitalization. This divergence raises critical questions about investor sentiment.
Widening Disconnect Between Bitcoin and Stock Performance
In its latest acquisition, Strategy purchased 487 Bitcoin for approximately $50 million, paying an average of $102,557 per coin. This addition brings the company’s total holdings to 641,692 BTC. The cumulative investment for this digital asset reserve stands at $47.54 billion, achieved at an average purchase price of $74,079 per Bitcoin.
Despite Bitcoin’s record-breaking performance, this achievement appears to have lost its positive influence on Strategy’s market valuation. The historical correlation between the cryptocurrency’s appreciation and the company’s share price has effectively dissolved. Market participants are no longer rewarding the Bitcoin accumulation strategy with a premium valuation; instead, they appear to be penalizing it.
Technical Analysis Reveals Sustained Downtrend
From a technical perspective, the chart formation presents a concerning outlook. Since reaching its peak in November 2024, the stock has been tracing a confirmed “Double Three Correction Pattern,” which technical analysts recognize as a bearish formation. The share price has decisively broken below all significant exponential moving averages, which have now transformed into a consolidated resistance zone.
Should investors sell immediately? Or is it worth buying Strategy?
Key concerning indicators:
* One-month decline exceeding 20%
* Trading more than 50% below its all-time high
* Breakdown through all major support levels
* Decoupling from Bitcoin price movements
* Increasing challenges in raising new capital
Even Prominent Short Seller Closes Position
A particularly telling development involves renowned short seller Jim Chanos exiting his negative position on Strategy. His rationale centered on the substantial contraction of the premium between the company’s enterprise value and the market value of its Bitcoin holdings. What was previously considered overvalued now appears fairly priced or potentially undervalued by this metric.
To finance its recent Bitcoin acquisition, Strategy generated approximately $50 million through the sale of preferred shares via an At-The-Market (ATM) offering program. However, the declining value of its common stock complicates future capital-raising efforts. Investors are increasingly scrutinizing the company’s fundamental business model and growing debt obligations. The strategy of relying solely on Bitcoin enthusiasm appears to have lost its effectiveness in sustaining investor confidence.
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