MSTR Stock Outlook as Strategy Trims Net Leverage to 0.1%

Strategy (NASDAQ: MSTR) stock price is up by 11% in the last five trading days leading up to August 28. The gains come as the Bitcoin treasury company reports that it has enough net assets to offset nearly all of its debts.

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Strategy’s Leverage Drops as STRC Nears Par

In an X post, Strategy revealed that its USD reserves have surged to $6.69 billion, while its debt stands at $6.75 billion. This means that the company has almost entirely settled its debt and the net leverage has dropped to 0.1%.

The growing cash reserve comes as Strategy continues to sell MSTR stock to either buy back STRC or grow its USD reserves. As reported recently by CoinGape, the company even set aside a $1.59 billion USD cash pool earlier this week to boost its Bitcoin treasury.

Strategy’s cash reserves are rising in tandem with the price of the STRC preferred stock. STRC shares are up by 32% since June 26, and traded at $98 at the time of writing. STRC is now only 2% shy of its par value of $100.

As reported earlier by CoinGape, Strategy’s CEO has opined that the company will not buy Bitcoin until STRC gets to par. With the recent rise, speculation is mounting on whether Strategy could resume buying Bitcoin.

Data from Saylor Tracker shows that Strategy currently holds 840,447 BTC that is valued at $66 billion. The company’s Bitcoin stash is also back in profit after BTC price surged to $80,000. Saylor Tracker shows that Strategy currently sits at an unrealized profit of $3.2 billion on its Bitcoin holdings.

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MSTR Stock Outlook as Rounded Bottom Pattern Emerges

MSTR stock has recorded more buying pressure than selling pressure for two straight weeks per the weekly chart. This chart also shows that MSTR stock is creating a rounded bottom pattern, suggesting that a reversal from a downtrend to an uptrend is underway.

Strategy shares have also moved above the resistance of this rounded bottom pattern at $120. If the uptrend continues above this resistance, and MSTR stock registers the same 46% gain that is shown by the rounded bottom, the price could reach $175.

The RSI reading of 50 also suggests that the momentum is no longer bearish after creating a series of higher lows in August. If this RSI creates a higher high above 50, MSTR stock price could start an uptrend that leads to $175.

The AO bars that are green and shrinking in size also suggest that the bearish momentum is becoming weak as buying pressure rises.

However, if this bullish thesis fails, MSTR stock could drop to retest the support at $120. If it closes below this support, the price could move to the psychological support of $100.