Is Strategy (MSTR) facing a 25% drop?

Strategy (formerly MicroStrategy) is on a wild ride as it runs up by 119% over the past year. Mostly seen as the Bitcoin proxy stock now boasts a staggering $101 billion market cap. However, its recent bet on Bitcoin might have opened a crack beneath the surface.

10X Research warns that Strategy’s days of high-flying volume may be over. Retail traders who were chasing the rally could soon shift toward even riskier, more volatile names like Metaplanet. This comes in when BTC went on to hit a fresh all-time high (ATH) of over $111,900 on May 22 before tracing back to the $107k zone.

Strategy risks steep pullback

Options traders say the days of 200–300% implied volatility are gone. Strategy’s at-the-money options now sit at 76%, which is still high, while the realized volatility is collapsing. For MSTR, declining volume also means less opportunity to source cheap volatility and sell it at a premium.

The report highlighted that the market could enter a phase where Strategy can acquire significantly less Bitcoin than it has over the past six months. 10x Research stated that it would “consider shorting MicroStrategy at $400, setting a stop loss at $430, and risking $30 to potentially gain $100 if the stock retreats to $300.”

It added that the momentum is fading as bearish divergences are flashing, and all three major reversal indicators have flipped negative. The 21-day moving average is sitting at $390, and below that level, long positions start looking shaky. A pullback could happen simply due to a compression in net asset value or, more broadly, if Bitcoin begins to consolidate. It is inevitable unless Strategy continues to drive it higher.

If MicroStrategy fails to hold the $400 level, the door to $300 swings is wide open. And as BTC volatility cools, the upside chase might move elsewhere, it added.

MSTR’s Bitcoin bet grows

As of May 2025, Strategy holds 568,840 Bitcoin (approx. worth $60 billion), after adding a massive 80,715 BTC just in Q1. It is suggested that the pace of Bitcoin accumulation may slow as the past six months saw unprecedented BTC purchases. Maintaining that momentum will be tough without further capital or massive Bitcoin price surges.

Strategy stock price has dropped by 7.5% in the last trading session to stand at $369.51. After-hours trading data shows that it might drop by another 3% to touch the $366 zone. However, it is still up by 23% year to date (YTD).

Bitcoin has seen a week full of fluctuations. On Monday, BTC was trading around $103K and went on to knock $106K in a few hours and saw a dump to straight $102K area. The original crypto then hovered above the $111K, trying to breach into $112K, but failed. Bitcoin is trading at an average of $107,380 at press time with a trading volume of $45 billion.

Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now