Is A MicroStrategy (MSTR) Crash Imminent to Avoid Bitcoin Liquidation?

Highlights

Prominent analyst Doctor Profit predicts MicroStrategy (MSTR) stock could crash if Michael Saylor fails to mitigate risks.
With an 11.26% drop yesterday to $237, MSTR is hovering near its critical 200-day moving average support level.
Rumors of MicroStrategy's 8-K filing with the SEC on April 7 suggested potential Bitcoin liquidations.

With the Bitcoin price crashing under $75,000, and just 10% away from MicroStrategy’s buying price, investors are predicting an MSTR crash ahead if Michael Saylor wants to avoid any Bitcoin liquidations. Furthermore, there’s been a strong rumor circulating that the firm might be forced to sell its BTC holdings if the crypto market correction doesn’t stop anytime soon.

Prominent crypto analyst Doctor Profit issued a stark warning to Michael Saylor, the co-founder and executive chairman of MicroStrategy (now Strategy), regarding the company’s significant Bitcoin holdings.

Highlighting concerns about Bitcoin’s current price trajectory, the analyst noted that Bitcoin is now only 10% above MicroStrategy’s average buying price of $67,485. Just as the firm sits on a massive $40 billion Bitcoin stash, investors are turning more and more anxious. “Let me predict it straight: MSTR will most likely be sold to avoid liquidation,” added Doctor Profit. The analyst further stated:

“Dear Michael Saylor, you are most likely becoming the next victim of this market. I would start selling as much BTC as I could in your case.”

MicroStrategy (MSTR) Stock Under Pressure Amid Liquidation Risks

MicroStrategy (MSTR) stock has come under severe selling pressure, correcting over 20% over the past week. This comes as the Trump tariff war escalates, sending the global markets on a tailsping, coupled with the Bitcoin price correction to $75,000.

Furthermore, there’s been a strong rumour that Michael Saylor’s firm has submitted 8-K form with the SEC on April 7, warning that a continued decline in Bitcoin’s price could compel the company to sell its Bitcoin holdings to repay debts. As of press time, BTC price is trading 2.52% down at $77,307 with a market cap of $1.534 trillion.

However, upon closer examination, the statement in question appears to be part of standard risk disclosure practices. The firm has been using the language in all of its reports during the previous 10 quarters, including the Q1 2024 filing and reports from 2023 and earlier.

Thus, this disclosure isn’t specific to the current market conditions but rather reflects a broader acknowledgment of potential risks associated with the company’s Bitcoin-heavy strategy.

Despite the 11.26% drop to $237 on Tuesday, the MSTR stock has surged by 3.29% in the after-hour trading session. The stock is closely flirting around its 200-DMA, a long-term support level, and falling under this could trigger severe correction.

Amid the current market correction, Michael Saylor’s Strategy has halted further Bitcoin purchases, with no changes in their holdings over the past week.

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Bhushan Akolkar

Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets.   He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.

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