Tons of misinformed posts about MSTR. From "MSTR Premium way above Bitcoin" to "Buy BTC ETF Instead".

As a quick explaination, this is why MSTR can continue to rise despite Bitcoin staying the same.

1. Analysis of Recent Market Movements on Monday/Friday:

On Monday, the price of Bitcoin remained stable around $72,000, while MSTR experienced a significant increase of 14.35%.

On Friday, Bitcoin saw a decrease from $71,000 to $69,000, yet MSTR increased by approximately 6.3%.

Contrary to the belief suggesting MSTR's price surge is attributed to leveraged Bitcoin purchases, this was due to substantial unrealized losses experienced by short sellers since MSTR's price at $400.

2. Misguided Assumptions by Short Sellers:

The high short interest observed in MSTR at its $400 price stemmed from short seller assumptions that investors would shift from mining stocks (such as MARA, RIOT, CLSK) and MSTR to ETFs for Bitcoin exposure. However, this assumption proved to be incorrect as the premium for MSTR grew faster than Bitcoin prices, resulting in substantial paper losses in the billions.

https://finance.yahoo.com/news/short-sellers-lost-3-3-233548587.html

3. High Paper Losses from Shorts Since $400

These losses, amounting to over $6 billion, have persisted due to a short interest of roughly 23% since MSTR's lower valuation. Despite a current short interest of approximately 17%, a significant portion of short sellers has yet to cover their billions in paper losses, indicating the potential for a short squeeze.

The impending Bitcoin halving puts higher pressure on hedge funds to exit their short positions on MSTR, thereby moving a stock towards a short squeeze squeeze.

4. Escalating Pressure on Short Sellers:

The convergence of rare events, including the imminent Bitcoin halving and the continuous upward trajectory of Bitcoin's price, has created pressure on short sellers. The prospect of Bitcoin's price sustaining levels above $60,000, coupled with the risk of significant paper losses leading to potential liquidations by lending institutions, has pressured short sellers to exit their MSTR positions. This scenario presents a unique confluence of circumstances, triggering a cascading effect as more funds cover their short positions.

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https://www.tradingview.com/news/newsbtc:41bbbffaf094b:0-bitcoin-crash-triggered-by-failed-1-billion-hedge-fund-spread-trade-expert/

https://www.nasdaq.com/market-activity/stocks/mstr/short-interest

Despite a current short interest of ~17%, a significant portion of short sellers have yet to cover their billions in paper losses. However, a few have covered their positions this week, which is why you've been seeing MSTR go up 14% or 6% despite Bitcoin prices dropping.

The main possibility short sellers get to liquidate their positions without a major loss is if Bitcoin prices sharply drop below typical correction levels (eg. $45k). Otherwise, if Bitcoin holds, drops slightly, or increases, we'll likely see MSTR go up in price due to billions in short seller buybacks.

We've already seen a pre-squeeze on Monday/Friday, and the main one is yet to come.