MicroStrategy Soars on Bitcoin Surge—What’s Fueling the Rally?

• MSTR shares climb 2.78% to $446.68, hitting a day high of $456.44
• Buys $472M in Bitcoin, total holdings now 601,550 BTC as BTC nears $123K
• Class action lawsuit looms over 2024-2025 financial disclosures

MicroStrategy’s midday surge reflects a market betting on Bitcoin’s ascent, even as regulatory risks simmer. The stock’s 2.78% jump to $446.68 marks its highest close since late 2023, with trading volume surging 5.34% as buyers test resistance near $450.

Bitcoin Buying Frenzy Drives Momentum
MicroStrategy’s rally is directly tied to its $472 million Bitcoin acquisition, expanding holdings to 601,550 BTC—a 0.74% stake of global supply. With Bitcoin hitting $123K, this purchase unlocked $31.17B in unrealized gains, fueling speculative enthusiasm. The stock’s surge also reflects confidence in CEO Michael Saylor’s strategy, despite warnings over cash burn and a class action lawsuit alleging misstatements in 2024-2025 disclosures. Technicals support the move: RSI at 70.53 signals overbought conditions, but bulls remain undeterred by fundamental headwinds.

Asset Managers Split on Bitcoin’s Appeal
While MicroStrategy bets big on Bitcoin, sector peers like BlackRock (BLK) +0.59% focus on traditional asset growth. Grayscale’s confidential IPO filing highlights crypto’s institutional pull, but mainstream firms remain cautious. MSTR’s 2.78% gain outpaces the sector’s muted performance, underscoring its singular Bitcoin focus amid mixed sentiment toward digital assets.

Leverage Bitcoin Bulls with Calls and ETFs
• Bollinger Bands: Upper $427.70 (current price above midline $390.51)
• RSI: 70.53 (overbought)
• MACD: 10.54 vs 5.91 signal line (bullish divergence)
• 200-day MA: $325.52 (far below current price)

Bulls target $460 resistance, with support at $440. The MSTR20250718C450 call (strike $450) offers 51.20% implied volatility and a 50.92% leverage ratio. Its delta of 0.45 and gamma of 0.0148 make it ideal for a $450-$460 breakout. The MSTR20250718C445 call (strike $445) boasts 40.69% leverage and high turnover ($12.5M), with theta of -3.03 offering time decay advantage. Both contracts benefit from Bitcoin’s $123K momentum.

Bold traders can pair these with bold MSTU (10.31) or MSTX (47.69), which amplify gains with 5.31%-5.52% daily leveraged exposure. Avoid puts—theta decay and bearish deltas make them unattractive. Action: Buy the July $450 call if Bitcoin holds $120K; target $460 for a 2.2% profit.

Backtest Microstrategy Stock Performance
The backtest of MicroStrategy (MSTR) following a 3% intraday increase shows a significant strategy return of 3548.53%, vastly outperforming the benchmark return of -100.00%. The strategy achieved an excess return of 3648.53% and a CAGR of 106.02%, indicating substantial growth potential. With a maximum drawdown of 0.00% and a Sharpe ratio of 1.07, the strategy also demonstrated strong risk management capabilities, maintaining a high return with minimal volatility.

Hold the Bitcoin Trend or Brace for Regulatory Crosscurrents
MicroStrategy’s rally hinges on Bitcoin’s ascent, but risks loom. Bulls must watch $460 resistance and BlackRock’s (BLK) $886.50 price—a sector bellwether. The class action lawsuit adds uncertainty, yet traders are pricing in Bitcoin’s upside. Hold calls until Bitcoin’s $123K milestone solidifies. If Bitcoin falters below $120K or the lawsuit broadens, expect a retreat toward $430 support. Final Tip: Stay long Bitcoin-linked plays but hedge with puts if volatility spikes—this is a high-reward, high-risk race to $500.