MicroStrategy (MSTR) is under renewed selling pressure, with its stock price falling sharply over the last two weeks. The decline has triggered the highest demand for put options since April, signaling growing bearish sentiment among traders.
MSTR Stock Drops 14% in Two Weeks
Shares of MicroStrategy have plunged more than 14%, closing at $292, and have now slipped below the critical 50-day simple moving average (SMA) — often seen as a trend indicator. This technical breakdown is driving traders to seek protection against further declines.
Traders are paying a premium for put options, indicating increased fear of more downside ahead.
Options Market Signals Growing Bearish Sentiment
On Wednesday, the one-year put-call skew — a measure of implied volatility difference between long-term puts and calls — rose to 3.6%, the highest level since mid-April. This reflects strong demand for downside protection, as investors grow wary of potential weakness in MicroStrategy’s stock price.
Put options give the buyer the right to sell the stock at a fixed price, offering a hedge against price drops.
A higher put-call implied volatility spread means investors are more concerned about protecting against losses than betting on gains. This signals a sharp shift in market expectations for MSTR in the next 12 months.
Bitcoin Holdings Expose MicroStrategy to Volatility
MicroStrategy remains the largest publicly traded Bitcoin holder, with 628,791 BTC valued at over $74.7 billion. While its Bitcoin accumulation strategy has made headlines, it also exposes the company to extreme crypto market volatility.
Despite long-term optimism about Bitcoin, MicroStrategy’s stock tends to mirror short-term moves in BTC price. The recent market weakness and investor caution are driving demand for hedging tools like puts.
With options traders positioning for further downside and the stock breaking below key technical levels, MicroStrategy may face continued pressure unless sentiment or fundamentals shift.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.