Strategy Inc. (MSTR) caught a break on Wednesday, with shares climbing after MSCI walked back a plan that would have booted crypto-treasury companies from its global indexes. Turns out the market really doesn't like uncertainty, especially when it involves potentially being kicked out of major benchmarks.
The Reversal Explained
Here's what happened: Last fall, MSCI floated the idea of removing digital asset treasury companies from its global benchmarks. Their reasoning? These companies operate more like investment funds than traditional operating businesses, and funds are typically excluded from indexes. Reuters reported the proposal sparked immediate concern that other major index providers might follow suit, creating a domino effect across the industry.
Crypto treasury firms weren't having it. They pushed back hard, arguing they're legitimate operating companies building real products, not just passive investment vehicles. The proposal, they said, unfairly singled out the crypto sector. On Wednesday morning during pre-market trading, MSCI apparently decided the fight wasn't worth it and reversed course.
"While this decision does not resolve longer-term questions around the index eligibility of DATCOs, it removes a material near-term technical risk for a subset of public equities that function as effective proxies for bitcoin/crypto exposure," said Owen Lau, analyst at Clear Street.
Technical Picture Remains Challenging
Wednesday's pop aside, Strategy's chart still looks pretty rough. The stock is trading below all major moving averages, sitting 0.9% under its 20-day, 16.9% below its 50-day, and a painful 48.5% beneath its 200-day moving average. That's textbook bearish positioning.
The RSI sits at 38.36, which is neutral territory—neither screaming oversold nor suggesting any immediate pressure. Meanwhile, the MACD is above its signal line, hinting at short-term bullish momentum. But here's the thing: that's happening against a firmly bearish backdrop, suggesting any strength might be more of a relief bounce than the start of something meaningful.
Key support sits at $155.50, and if that level breaks, things could get uglier. Without a clear resistance level above, the stock faces an uphill battle to regain momentum without a significant catalyst.
The death cross happened back in October when the 50-day moving average crossed below the 200-day—a classic bearish signal that typically indicates longer-term weakness. Over the past year, Strategy has dropped 51.91%, and the stock now sits at just 4.7% of its 52-week range, meaning it's hovering near recent lows. That's a critical juncture where any further decline could trigger increased selling pressure.
Price Action: Strategy shares were up 2.58% at $162.10 at the time of publication Wednesday, according to market data.