Bitcoin's Dip Impacts MicroStrategy Stock as Transaction Volume Cools and Liquidations Spike

MSTR shares closed down Wednesday, due to a decline in Bitcoin's BTC/USD price, which dropped 1.73% to $104,313.65.

MicroStrategy Incorporated (NASDAQ:MSTR) shares closed down Wednesday, as Bitcoin (CRYPTO: BTC/USD) price dropped 1.73% to $104,313.65.

Bitcoin transaction volume above $100,000 decreased by 15%, while netflows dropped 307%, signaling a possible cooling of market activity. Over $161 million in liquidations occurred in the past 24 hours, which put additional pressure on the market.

While BlackRock (NYSE:BLK) clients facilitated the purchase of $600 million in Bitcoin via an ETF, market sentiment remains cautious due to the nature of these transactions.

Bitcoin’s liquidity is concentrated between $96,000 and $111,000, with support levels between $88,000-$95,000. If these levels fail, Bitcoin could drop further, potentially impacting MicroStrategy’s stock as well.

Despite the short-term volatility, Bitcoin’s overall bullish trend remains intact as long as it stays above $58,000, which provides some stability for MicroStrategy.

For MicroStrategy, the company’s heavy exposure to Bitcoin potentially means its stock is especially sensitive to Bitcoin’s price. The company also recently received shareholder approval for a proposal to increase its share count, which could lead to more Bitcoin purchases in the future.

MSTR Price Action: Microstrategy shares closed Wednesday down 3.03% at $377.31, according to Benzinga Pro.