Brief Overview
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Shares of MicroStrategy (MSTR) plummeted to $135 following the sale of 32 Bitcoin (BTC) for $2.5 million, a mere fraction of its total 843,706 BTC holdings, representing less than 0.004%.
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Coinbase (COIN) experienced a decline to $172, as a net loss of $1.49 per share in Q1 and a 31% year-over-year revenue drop heightened concerns regarding Bitcoin’s downturn.
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MicroStrategy’s shares are down 10% during mid-morning trading on Tuesday, while Coinbase has seen a 6% dip. This downward trend is attributed to Bitcoin (CRYPTO:BTC) dipping below the $70,000 mark.
Currently, Strategy stock is trading around $135, down from $149.78 at Monday’s close, while Coinbase is at approximately $172, down from $182.61. Bitcoin’s last valuation was around $67,200, reflecting a 5% decrease over the past 24 hours.
This marks the second day of a selloff triggered by Michael Saylor’s actions, with the previously identified $70,000 support level now compromised.
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Bitcoin Falls Below $70,000
Bitcoin has seen an 8% decline this week and a 14% drop over the month. Year-to-date, BTC has decreased by 23%, and over the past year, it has fallen by 36%.
This technical breakdown is significant as both MicroStrategy and Coinbase are highly correlated with Bitcoin prices. MicroStrategy’s earnings are closely linked to Bitcoin price shifts, whereas Coinbase’s transaction revenue closely follows retail trading volumes.
Two Trading Sessions, Significant Losses
In the last two sessions, shares of MicroStrategy have dropped 16% from Friday’s close of nearly $159. Coinbase shares have lost about 10% in the same timeframe.
The recent decline was sparked by MicroStrategy’s initial Bitcoin sale since December 2022, where 32 BTC were sold between May 26 and May 31 for about $2.5 million. Executive Chairman Michael Saylor characterized this move as aimed at “maximizing Bitcoin-per-share,” while CEO Phong Le mentioned that the funds would be used for preferred dividends, including the STRC 12% yield.
Balancing Fundamentals with Market Trends
The fundamental situation surrounding MicroStrategy remains unchanged. The sale of 32 BTC constitutes less than 0.004% of their total 843,706 BTC stack, and Polymarket estimates only a 5% chance of an MSTR margin call in 2026, limiting the risks of forced selling.
However, market sentiment is overshadowing the numbers. Discussions on Reddit remain largely pessimistic regarding MicroStrategy stock, with the WallStreetBets thread titled “MSTR sold 32 BTC- more to come?” garnering 447 upvotes by Tuesday morning. Additionally, Mizuho reduced its price target for MSTR from $320 to $265, while maintaining its Outperform rating.