Can MicroStrategy Still Boost Bitcoin’s Rally as Hedge Funds Short the Market?

Can MicroStrategy Still Boost Bitcoin’s Rally as Hedge Funds Short the Market?

Can MicroStrategy Still Amplify Bitcoin’s Upside as Hedge Funds Bet Against It?

MicroStrategy (NASDAQ: MSTR), one of the largest corporate holders of Bitcoin, is facing renewed pressure as hedge funds take control of trading activity and long-term volatility in both the stock and Bitcoin continues to decline.

$360 Becomes the Key Support Level...

According to a new analysis by 10x Research, MicroStrategy has been stuck in one of its tightest ranges in years, with $360 repeatedly serving as a critical support line. The stock has tested this level several times in recent months, signaling reduced investor conviction and fading momentum.

The report also revealed that Vanguard — MicroStrategy’s largest shareholder — cut its stake by 10% last quarter. While some long-only investors stepped in, hedge funds have since dominated market flows, making the $360 level a potential tipping point for whether MSTR breaks down further or stages a recovery.

Bitcoin Exposure Losing Its Edge..

Bitcoin Treasuries Falling Out of Favor

The report compared MicroStrategy’s performance to other Bitcoin treasury stocks, finding the trend applies across the board:

• MicroStrategy (MSTR): Down 13% since mid-July

• Metaplanet (Tokyo-listed): Down 37% in the same period

This decline was linked to collapsing volatility across both Bitcoin and MSTR, eroding the premium investors once paid for exposure. With less volatility (“convexity”), Bitcoin treasury firms are losing their capital-raising power and market appeal.

Investors Shift Toward Ethereum and Crypto IPOs..

At the same time, fresh investment flows are moving toward Ethereum treasuries and crypto IPOs, which are seen as offering better growth opportunities. This trend supports 10x Research’s earlier call that Bitcoin treasuries would lose their edge in summer 2025.

The Big Question for Investors..

The report concludes with a key dilemma:

➡️ Should investors re-enter MicroStrategy at a specific price level such as $360, or wait for broader market conditions that could revive demand for corporate Bitcoin exposure?