Key Points

• MicroStrategy is planning to boost its Bitcoin holdings with the proceeds from its $500 million convertible notes sale.
• MicroStrategy's stock has consistently outshined Bitcoin, presenting more favorable short-term returns.

MicroStrategy (MSTR) revealed its strategy on June 13 to augment its Bitcoin reserves by utilizing the earnings from a $500 million convertible notes issuance. These senior notes, maturing in 2032, will be utilized for purchasing additional Bitcoin and fulfilling general corporate obligations.

Utilizing debt for expanding its Bitcoin approach, MicroStrategy purchased an extra 122 BTC coins for $7.8 million in April, escalating its total Bitcoin holdings to 214,400 BTC valued at over $14.5 billion according to current market prices.

MicroStrategy's Stock Performance

Despite factors like its inclusion in the MSCI Index and the upcoming addition to the Russell 1000 Index on June 28, MSTR's stock has closely followed Bitcoin's price movements. Notably, MSTR has frequently outperformed Bitcoin, making it a more lucrative option for short-term investments.

Even in the face of market downturns, MSTR's market structure has remained sturdy. The price action consistently stayed above the 100-day and 50-day Exponential Moving Averages (EMAs), indicating the robustness of MSTR's short and long-term price trends.

The Relative Strength Index (RSI) sustained levels above the midpoint, showcasing heightened buying pressure. The stochastic RSI, nearing oversold territory, hints towards a potential bullish turnaround. If realized, MSTR might rebound from the 50-EMA and target levels of $1800 or $2000.

However, in scenarios of further losses in Bitcoin's value, MSTR's stock might descend towards the 100-EMA at $1256. The Average Directional Index (ADX) below 20 signals a lack of a prominent trend, advising traders to exercise caution.

Despite the market's volatility and price consolidation over recent months, MSTR consistently offered superior returns compared to Bitcoin. Currently, on a monthly adjusted basis, MSTR delivered gains of +30%, overshadowing Bitcoin's +7% during the same period, translating to nearly four times the returns provided by Bitcoin.