MicroStrategy Stock Sees First 6-Month Decline Since Bitcoin Strategy Adoption

VADODARA, January 1, 2026 — MicroStrategy (MSTR) has recorded its first six-month consecutive stock price decline since adopting its Bitcoin treasury strategy in 2020, according to a CoinDesk report. This latest crypto news highlights a critical divergence from Bitcoin's performance, with MSTR falling 27.36% over six months while Bitcoin showed relative resilience. Market structure suggests a potential structural repricing of the company's value, as historical rebounds have failed to materialize.

Market Context & Background

MicroStrategy's Bitcoin strategy, initiated in 2020, has historically mirrored Bitcoin's price action, creating a leveraged exposure for equity investors. According to on-chain data, this correlation has been a key driver of MSTR's volatility. The current decline mirrors broader market stress, with the Crypto Fear & Greed Index at 20/100, indicating Extreme Fear. This environment has seen similar liquidity grabs in DeFi, such as the $400 million USDT transfer from HTX to Aave, highlighting capital flight to perceived safe havens. Historical cycles suggest that prolonged equity declines in crypto-linked stocks often precede broader market capitulation events.

What Happened?

According to cryptocurrency analyst Chris Millhas, MSTR's stock fell continuously from July to December 2025. Sharp drops occurred in August (-16.78%), October (-16.36%), November (-34.26%), and December (-14.24%). In contrast, Bitcoin's six-month decline was 27.36%, showing less severe drawdowns. Millhas observed that while MSTR has historically rebounded quickly after major drops, the current prolonged decline is an exception. This data, sourced from monthly return analyses, indicates a breakdown in the traditional beta relationship between MSTR and BTC.

Technical Analysis & Price Action

Market structure suggests MSTR is testing a critical order block established during its 2024 rally. The stock's volume profile shows increased selling pressure, with a Fair Value Gap (FVG) forming between $1,200 and $1,400. Bitcoin, currently at $87,864, faces key support at the 200-day moving average near $85,000. A break below this level could trigger a gamma squeeze in derivatives markets. Bullish invalidation for MSTR is set at $1,000, below which further declines are likely. Bearish invalidation rests at $1,600, a break above could signal a reversal. The divergence highlights risks in leveraged crypto exposures, as noted in regulatory discussions on the SEC's official website regarding asset correlations.

By The Numbers

Why It Matters

This event matters for institutional portfolios heavily weighted in crypto-correlated equities. A decoupling could force rebalancing away from single-stock exposures like MSTR toward direct Bitcoin holdings or ETFs. For retail, it the risks of indirect crypto investments during market stress. The structural repricing may reflect concerns over MicroStrategy's debt load tied to Bitcoin purchases, impacting its weighted average cost of capital. On-chain forensic data confirms that large holders are reducing positions, similar to patterns seen in recent DeFi liquidity grabs.

Community Sentiment

Market analysts on X/Twitter are divided. Bulls argue this is a temporary dislocation, citing MSTR's historical resilience. Bears point to the prolonged decline as evidence of a broken model. One analyst noted, "The correlation breakdown suggests MSTR is being priced on fundamentals, not just Bitcoin beta." This sentiment aligns with broader fears, as seen in technical breakdowns in altcoins like Dogecoin.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds support at $85,000 and rallies, MSTR could rebound to fill the FVG near $1,400. This scenario requires a reduction in Extreme Fear sentiment and renewed institutional inflows. Historical patterns indicate such moves often follow Fed policy shifts, like changes to the Fed Funds Rate.

Bearish Case: If Bitcoin breaks below $85,000, MSTR could test $800, invalidating the bullish structure. This would signal a deeper repricing, potentially driven by credit risk or regulatory headwinds. Market structure suggests this outcome aligns with current volume profile trends.