By 
After two days of gains, MicroStrategy’s stock price has hit a pause. Following a $500 million debt offering, the company is now even more dependent on Bitcoin.
MicroStrategy shares closed at $508.65, down $4.34 or 0.85%.
No matter what people say about MicroStrategy’s CEO, Michael Saylor, it’s clear he is deeply committed to Bitcoin. Back in August 2020, Saylor made waves in the cryptocurrency market by announcing that MicroStrategy would begin purchasing Bitcoin to diversify its treasury holdings.
Since then, the company has acquired over $3.5 billion worth of Bitcoin. Given that MicroStrategy’s total market cap is around $4.5 billion, the company is now more concentrated in Bitcoin than ever.
After El Salvador’s decision to accept Bitcoin as legal tender, Saylor took to Twitter to announce that MicroStrategy would issue $400 million in senior secured notes to buy more Bitcoin.
This bold and risky move has made MicroStrategy’s stock price even more tied to its Bitcoin holdings.
But Saylor didn’t stop there. The company increased the offering, marking the first time a business has sold “junk” bonds for speculative purposes. Surprisingly, the offering was heavily oversubscribed, indicating that institutional investors are still eager to gain exposure to Bitcoin.
On the daily chart, MicroStrategy has recovered the crucial 200-day moving average at $453.74, which is a positive sign. The increasing trading volume over the past few days further supports a bullish outlook.
However, the stock is still far from resuming its 2020 uptrend. Bulls might consider adding to their positions here, with a tight stop set just below the 200-day moving average at $453.74. If the stock falls below this level, it could trigger a broader sell-off.
A note of caution: Bitcoin trades over the weekend, while MicroStrategy does not. A significant drop in Bitcoin’s price during the weekend could lead to sell orders being executed at worse levels than anticipated when the market reopens.