Stock Falls to Five-Month Low Giving Short Sellers a Boost

Strategy (MSTR) fell to as low as $326 on Wednesday, trading about 4% below the 200-Day Moving Average (DMA) of $340, a key level markets watch for trading ideas.

The indicator is a widely used technical measure that smooths out price data over roughly nine months of trading, helping investors identify long-term trends. When a stock trades above its 200-DMA, it is generally seen as being in an uptrend, while trading below it may signal potential weakness or a shift in momentum. Because of its role as a key support or resistance level, the 200-DMA is closely watched by both traders and long-term investors.

In recent years, the 200-DMA has been a notable level of support for MSTR.

For instance, in April 2025, during the so-called “Trump tariff tantrum,” the stock tested this level before rebounding. A similar pattern emerged during the summer of 2024, when MSTR once again found a floor around the 200-DMA before resuming its upward trajectory.

Whether the current dip below this technical threshold proves temporary or signals a more sustained downturn will likely depend on both bitcoin’s price action and broader market sentiment.

Chanos notches a win

Famed short-seller James Chanos has been publicly bearish on Strategy for a number of weeks, saying he’s opened up a sizable bet against the Michael Saylor-led company by shorting MSTR against a long in bitcoin.

Of late, the trade has been looking like a winner, with MSTR lower by 21% over the past month compared to bitcoin’s very modest 3.5% decline.

Market technician J.C. Parets noted on Wednesday that the ratio between MSTR and IBIT (BlackRock’s spot bitcoin ETF) has now fallen to a five-month low. “This one is accelerating quickly,” said Parets.