Strategy Stock Slides as Traders Brace for More Downside

Shares of Strategy (MSTR), the largest public holder of bitcoin, have dropped more than 14% over the past two weeks, closing Wednesday below the key 50-day simple moving average—a sign of weakening technical momentum.

At the same time, demand for downside protection has surged. The one-year put-call skew, which measures the spread in implied volatility between long-dated puts and calls, jumped to 3.6% on Wednesday, its highest level since April 17, according to Market Chameleon. This indicates investors are increasingly pricing in the risk of a deeper decline in MSTR shares.

In simple terms, options traders are paying a steeper premium for put options—contracts that benefit when prices fall—versus calls, reflecting growing bearish sentiment on the stock’s outlook.

“An elevated put-call skew signals that traders expect more downside and are hedging accordingly,” AI models from CoinDesk noted. “The divergence in implied volatility between puts and calls shows that the market is assigning a higher probability to a continued drawdown in MSTR’s price.”

A longtime bitcoin bull, Strategy has amassed a holding of 628,791 BTC—worth nearly $75 billion—positioning the firm as a proxy for institutional exposure to the digital asset. Its aggressive accumulation of bitcoin over the past five years helped fuel dramatic gains in its share price, especially during bull markets.

But recent weakness in bitcoin and broader market concerns appear to be weighing on sentiment. MSTR closed at $392, and its dip below the 50-day SMA could signal more technical selling pressure ahead.