Strategy’s cash reserve is down 38% as dividend obligations near $1.2 billion, raising dilution risk for MSTR shareholders.
Michael Saylor’s Strategy (MSTR) is testing a technical setup that last appeared before the stock’s 99% collapse during the dot-com bubble burst in the early 2000s.
As of late June, MSTR’s monthly chart was painting a potential head-and-shoulders (H&S) pattern.
An H&S pattern develops when the price forms three peaks, with the middle peak, called the "head," being steeper than the other two, which are called "shoulders." The neckline is the support level connecting the major pullbacks between those peaks.
The pattern typically resolves when the price breaks below the neckline and, in a perfect scenario, falls by as much as the maximum distance between the head and the neckline.
MSTR monthly performance chart. Source: TradingView
MSTR has formed a near-perfect H&S pattern since March 2024 and risks a breakdown below the neckline support at $100–$105.
A decisive move below it would confirm the bearish setup. It could open the door to a deeper, multi-year correction toward the measured target of around $20, down approximately 80% from current levels.
The structure looks similar to the head-and-shoulders top MSTR formed during the dot-com bubble era. Back then, the stock broke below a comparable neckline setup before collapsing by more than 99% from its peak in two years.
MSTR monthly performance chart. Source: TradingView
Strategy’s common stock, MSTR, is facing fresh dilution risk as the company’s cash reserve shrinks and its preferred-stock dividend burden grows.
As of June, Strategy’s US dollar cash reserve had fallen 38% since the start of 2026, while its yearly dividend obligations had nearly quadrupled to $1.2 billion, according to CryptoQuant analyst Julio Moreno.
Source
This article is syndicated for educational reading. For the latest updates, visit the original publisher.
Read on cointelegraph.com
