MicroStrategy Surges to 6-Month High as Bitcoin Wrestles With Key Moving Average

The
crypto
rally
stumbled
during
the
Monday
U.S.
trading
session
with
bitcoin

(BTC)
slipping
to
$62,800
from
near
$64,000
within
an
hour
along
with
an
abrupt
nosedive
in
the
stock
market.

The
quick
volatility
burst
happened
without
any
immediately
apparent
reasons,
sending
the
S&P
500
and
the
Nasdaq
tumbling
over
1%
during
the
afternoon
session,
while
the
volatility
index
VIX
spiked
19%
to
its
highest
reading
in
a
month.

Stock
indices
closed
the
day
around
their
lows,
but
bitcoin
quickly
recovered
some
of
the
losses,
recently
changing
hands
at
$63,300,
up
0.7%
over
the
past
24
hours,
but
down
nearly
2%
from
its

daily
high
of
$64,400.
The
broad-based
benchmark

CoinDesk
20
Index
gained
0.3%
over
the
same
time
period.

The
rollercoaster
in
prices
hit
bulls
and
bears
equally,
liquidating
over
$210
million
worth
of
leveraged
derivatives
trading
positions
across
all
digital
assets,

CoinGlass
data
shows.
Some
$110
million
of
liquidations
were
longs
betting
on
higher
prices,
while
$105
million
worth
of
positions
were
shorts
anticipating
price
weakness.

What
may
have
helped
cryptocurrencies
to
recover
quicker
versus
the
stock
market
is
that
a
U.S.
judge

approved
FTX’s
bankruptcy
plan,
opening
the
way
to
repay
creditors
of
the
imploded
crypto
exchange.

Still,
Monday’s
price
action
meant
that
BTC
briefly
reclaimed
the
200-day
moving
average,
which
currently
sits
at
$63,575
per
TradingView
data,
but
ultimately
failed
to
hold
above
it.
Moving
and
holding
past
that
key
level
would
reaffirm
bitcoin’s
uptrend
since
the
lows
of
around
$52,000
hit
in
the
first
week
in
September.

Digital
asset
investment
product
issuer

ETC
Group
–
recently
acquired
by

Bitwise
–
noted
that
bitcoin’s
rise
over
the
past
few
days
coincided
with
increasing
odds
of
Donald
Trump
winning
the
U.S.
presidential
election
in
November.
Bettors
on
blockchain-based
prediction
marketplace

Polymarket
see
53.5%
odds
for
a
Trump
win
versus
Kamala
Harris,
up
from
equal
chances
on
Friday.

MicroStrategy
(MSTR)
was
a
notable
outlier
amid
a
weak
stock
market,
with
shares
surging
to
$190
for
the
first
time
since
late
March
and
closing
the
day
5.5%
higher.
The

company
is
the
largest
public
corporate
owner
of
bitcoin,
holding
nearly
$16
billion
of
the
asset.

Markus
Thielen,
founder
of
10x
Research,
noted
in
a
report
before
Monday
market
open
that
a
breakout
above
the
$180
price
level
could
beget
more
strength,
even
though
his
regression
analysis
showed
the
stock
was
already
44%
overvalued
versus
BTC.

“Market
makers
may
be
forced
to
hedge
their
short
gamma
exposure
as
they
likely
sold
calls
to
retail
investors),
and
hedge
funds
holding
$4.6
billion
in
short
positions
on
MicroStrategy
shares
could
face
pressure
to
cover
those
shorts
if
the
price
surpasses
the
$180
mark,”
Thielen
wrote.

The
rally
could
induce
MicroStrategy
to
raise
even
more
debt
for
acquiring
bitcoin,
as
demand
for
the
company’s
notes
have
been
strong
with
consistently
upsizing
the
issuance,
Thielen
said
in
the
report.

“Raising
even
more
debt
to
purchase
bitcoin
seems
logical,”
he
wrote.
“A
breakout
in
MicroStrategy’s
stock
could
have
a
‘tail
wags
the
dog’
effect,
where
the
momentum
in
its
shares
positively
impacts
Bitcoin’s
price,
creating
a
feedback
loop.”