MicroStrategy Stock Drops 3% Amid 855 Bitcoin Buy, What’s Next for MSTR?

Key Insights:

• MicroStrategy stock fell 2.8% to $145.76 despite announcing an 855 Bitcoin purchase for $75.3 million at $87,974 per coin.
• The company funded the acquisition through ATM share sales totaling $106.1 million, raising concerns about dilution among investors.
• Technical analysts identified $140 as critical support, with RSI reaching oversold levels that historically preceded explosive rallies.

Strategy (formerly MicroStrategy) announced on February 2 that it acquired 855 BTC for approximately $75.3 million at an average price of $87,974 per Bitcoin. This latest purchase brings the firm’s total holdings to 713,502 BTC.

The historical cost of the purchase is $54.26 billion, with an average of $76,052 per BTC. Despite the continued accumulation strategy, MSTR stock declined nearly 3% to $145, highlighting a disconnect between Bitcoin purchases and equity performance.

The muted market reaction to MicroStrategy stock reflected several factors working against the announcement.

Bitcoin’s intraday volatility overshadowed the headline, with Bitcoin price trading at a deep low near $74,600 before rebounding approximately 1.5% on the day.

That kind of swing tends to hit MicroStrategy stock harder because investors reprice the equity’s volatility premium in response to factors beyond spot Bitcoin movements.

The purchase size was small relative to the existing treasury, representing just 0.12% of total holdings and failing to materially change the valuation equation for shareholders who already hold the company’s substantial Bitcoin exposure through equity.

More critically, Strategy disclosed in its 8-K filing that it funded the purchase through an ATM share sale, with 673,527 common shares sold for $106.1 million in net proceeds.

MicroStrategy Stock: Dilution Concerns Override Accumulation Signal

When the market interprets Bitcoin purchases as “issue equity to buy Bitcoin,” the dilution and flow effects can dominate the positive signal intraday.

The optics proved particularly challenging as MicroStrategy paid $87,974 per BTC for this tranche. At the same time, Bitcoin USD traded below that level, making the marginal purchase appear immediately underwater and weighing on sentiment.

Bitcoin Treasuries flagged MicroStrategy (MSTR) stock trading at an mNAV of approximately 0.95 as Bitcoin dipped to $74,553 over the weekend. This indicates a premium compression even as the BTC price stabilized.

When Bitcoin price declines sharply, the premium that MicroStrategy stock commands over its Bitcoin holdings tends to compress as investors de-risk the proxy vehicle, regardless of the underlying asset’s subsequent recovery.

The disconnect highlights how MSTR stock responds not only to Bitcoin accumulation but also to the funding mechanism, purchase timing relative to market conditions, and the preservation of shareholder value through the capital structure.

With the company paying above-market prices while diluting existing shareholders through ATM offerings, the announcement failed to generate the enthusiasm that characterized earlier, larger purchases made at more favorable entry points.

MicroStrategy (MSTR) Stock Eyes Critical Support at $140

Technical analyst Ryan Hogue noted on February 1 that MicroStrategy stock reached an RSI of 35, a level that has historically preceded explosive upward moves in the current pattern.

His analysis identified two prior instances in which an RSI reading of 35 marked inflection points for significant rallies. The MSTR price is currently testing the descending trendline that has defined the downtrend since late 2024.

According to Hogue’s chart patterns, the key support level to maintain for upward potential is $140.

If MSTR stock holds above this threshold while RSI remains oversold, the technical setup could mirror prior bottoming formations that led to substantial rebounds once momentum shifted.

Analyst Freedom by 40 shared on January 30 that MSTR stock “has been testing everyone’s patience for what seems forever, but I think this is getting very close to turning now.”

His Elliott Wave analysis suggested the current zone between $140 and $145 likely represents the inflection point for an upward move. However, Fibonacci retracement levels indicated a potential for a deeper test toward $119.56 if support fails.

The technical framework indicated that MicroStrategy stock is completing a corrective wave structure, with the company currently positioned near a potential reversal zone or a continuation of the broader downtrend, depending on whether support holds.

Both analysts emphasized that the $140-$145 range represents a critical juncture at which accumulation by long-term holders could overwhelm near-term selling pressure.

Market Structure Favors Patience Over Conviction

The divergence between Bitcoin accumulation and MicroStrategy (MSTR) stock performance illustrates how market structure factors can temporarily override fundamental theses.

While Strategy continues to execute its Bitcoin treasury strategy, equity investors face the realities of dilution, premium compression, and volatility that do not always reward immediate conviction.

With technical indicators reaching oversold territory and key support zones being tested, the coming sessions will determine whether MSTR stock can find buyers willing to look past short-term funding mechanics toward the longer-term Bitcoin exposure thesis.