Smart Money Bets Big on MicroStrategy Stock Despite 40% BTC-Driven Crash
While MicroStrategy stock cratered 40%, smart money traders on Hyperliquid are piling into net long positions, signaling conviction in a BTC-driven rebound. This aggressive positioning suggests the recent drawdown is seen as exhausted, but the upside is likely capped.
MicroStrategy's stock has been hammered, shedding 41% in a month, far outpacing Bitcoin's own slide. Yet, the sharpest traders are doubling down. Wallets tagged as 'smart money' on Hyperliquid have flipped to a net long of $2.5 million, with a long-to-short ratio of 1.74. This cohort rebuilt its longs during the recent flush, betting the dip is over.
The correlation between MSTR and Bitcoin is a staggering 0.90, confirming the stock is trading as a direct proxy for BTC. Macro factors like bond volatility or the dollar are barely registering. This means the smart money long is essentially a leveraged bet on Bitcoin's recovery, not a play on traditional markets.
Options flow also shows a rotation from puts to calls, with the put-call ratio dropping to 0.80. While existing hedges remain, fresh bearish bets are drying up, aligning with the perp futures positioning. This suggests traders are anticipating upside, but the conviction isn't universal across all wallet types.
Despite the bullish positioning, the upside for MSTR appears capped. Analysts have already slashed price targets, and the stock's rebound is directly tied to Bitcoin's ability to hold its ground. Any significant BTC weakness will likely drag MSTR down, limiting the potential gains from these aggressive long bets.