MicroStrategy Stock Price Risks $96 After Becoming the Most Shorted Large Cap

Key Insights

• MicroStrategy stock price briefly touched $119 critical support before bouncing to $124.61 on Feb. 24.
• MSTR topped Goldman Sachs short interest list at 14% of market cap becoming the most shorted stock over $25 billion.
• Break below $119 exposes $106 then $96 levels while the company holds $7-8 billion unrealized Bitcoin losses.

MicroStrategy stock price tested critical support on Feb. 24. The stock briefly touched $119 before bouncing back to close at $124.61. The $119 level is important because it sits at a key technical level. Losing that support could trigger a cascade lower toward $100 or below.

At the same time, MSTR just topped a notable list. Goldman Sachs and FactSet data show MicroStrategy as the most shorted large-cap stock. Short interest hit 14% of market cap. That’s roughly double the typical 7% average. Approximately 32.38 million shares are sold short. Hedge funds, including Citadel, Millennium, and Balyasny, are betting against the company.

MicroStrategy (MSTR) Tops Short Interest at 14% on Bitcoin Bet

The short interest ranking is significant. MicroStrategy wasn’t even in the top 50 most shorted stocks a year ago. Now it leads all companies with market caps over $25 billion. Bears are making a specific bet. They think Bitcoin drops further, and MicroStrategy’s leveraged position breaks.

The company holds 717,722 Bitcoin. Total cost basis sits around $54.56 billion at an average price near $76,020 per coin. But current Bitcoin prices around $64,000 to $66,000 create approximately $7 to $8 billion in unrealized losses. That’s the vulnerability shorts are targeting.

Bears in Control | Source: X

MicroStrategy keeps buying more Bitcoin through equity raises. The strategy amplifies gains when Bitcoin rises. But it also amplifies pain when Bitcoin falls. Recent Bitcoin ETF outflows and crypto market weakness pressure the entire thesis. Bears see this as a stretched trade ready to unwind.

Days to cover sit low at 1.7 to 2.2. That means shorts could exit quickly if needed. But the 14% short interest still represents conviction. These aren’t quick position changes. Major institutions are taking size positions against the stock.

MicroStrategy Stock Price Support Decides $96 Drop or Rally

The technical setup shows a pennant pattern forming. MicroStrategy stock price has been touching both upper and lower trend lines repeatedly. That creates a tightening range showing indecision. Buyers and sellers are balanced. The next break probably determines direction for weeks.

MicroStrategy Stock Price Structure | Source: TradingView

Technical analysis provides specific levels. Break below that exposes $106 as the next support, followed by $96.

That’s where things get concerning. A drop to $96 would represent another 23% decline from current levels.

The psychological $100 level sits in between. Losing triple digits would damage sentiment significantly. It would validate the short thesis. Momentum would probably accelerate lower as stop losses trigger.

On the upside, the MicroStrategy stock price needs to reclaim $139 to show real strength. That level represents recent resistance. Breaking above would suggest buyers regained control. It could trigger short covering given the high short interest. That might create a squeeze higher.

Bitcoin Holdings Create Leverage That Amplifies Price Swings

The core issue is Bitcoin exposure. MicroStrategy operates as a leveraged Bitcoin proxy. The stock trades at a premium to its Bitcoin holdings. That premium exists because of the leverage from debt and equity raises. But that same leverage cuts both ways.

Recent performance shows the pain. The MicroStrategy stock price is down 18% to 20% year-to-date. It started in 2026 at around $150. The drop mirrors Bitcoin’s weakness but is amplified. Bitcoin fell, but MicroStrategy fell harder. That’s how leverage works.

The company dominates corporate Bitcoin buying, and the accumulation continues despite price weakness.

Bulls see long-term value in the MicroStrategy stock price if Bitcoin recovers. Bears see a stretched balance sheet vulnerable to further Bitcoin declines. The 14% short interest reflects that bearish view.

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