Wall Street traders have placed massive bets that Michael Saylor’s company will crash. As of late February 2026, over 30 million MSTR shares are being sold short.
Currently, Strategy has a massive amount of short interest, where roughly 11% to 14% of its available shares are sold short. The “days to cover” ratio is hovering around 2.2. Hence, it would take more than 2 full days of normal trading volume for all short sellers to close their positions. If a sudden rally hits, there simply isn’t enough liquidity for everyone to get out cheaply. This is the classic recipe for a Short Squeeze.
While a huge chunk of the market is betting on the price going down, Strategy isn’t just a normal tech stock; it’s a leveraged Bitcoin Proxy.
Yesterday, 25 February 2026, Bitcoin rallied from $64k to $69k within hours. Because Strategy holds such a massive amount of Bitcoin on its balance sheet, its stock price moves in lockstep with BTC, but often with much higher volatility.
As BTC USD recovered by a few thousand, Strategy stock MSTR rallied by 9%.
If the price of MSTR unexpectedly starts to rise, perhaps because Bitcoin jumps in value, these short sellers instantly start losing money. To stop the bleeding, they are forced to buy the stock back at current market prices. This forced buying pushes the price up even further, which forces more short sellers to buy, creating a chaotic feedback loop.
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Short Sellers Piled In Because They Believe Either Bitcoin Is About To Drop, Or MSTR Is Trading At Too High A Premium
Short selling is when a trader borrows a stock and sells it immediately, hoping to buy it back later at a lower price to pocket the difference. Basically, they are betting on a crash.
While this mountain of negative bets looks terrifying on paper, it could actually be the fuel for a massive price explosion.
Historically, when crowds of traders lean too heavily to one side of the boat, the market has a nasty habit of tipping the other way. For someone who holds MSTR or is just watching from the side lines, this is an interesting paradox unfolding right now.
Right now, short sellers are piling in because they believe two things: either Bitcoin is about to drop, or MSTR is trading at too high a premium compared to the Bitcoin it actually owns. They are betting that the company’s Bitcoin holdings are underwater relative to the stock price. However, this aggressive positioning leaves them exposed.
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Bitcoin’s Role: The Critical Price Levels to Watch
Despite Bitcoin’s recent volatility, Saylor has been doubling down on BTC. He recently completed his 100th purchase of 592 BTC.
Strategy has acquired 592 BTC for ~$39.8 million at ~$67,286 per bitcoin. As of 2/22/2026, we hodl 717,722 $BTC acquired for ~$54.56 billion at ~$76,020 per bitcoin. $MSTR $STRC https://t.co/jSQroB4LnE
— Michael Saylor (@saylor) February 23, 2026
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For MicroStrategy, the ignition switch is almost always Bitcoin’s price action. The stock rarely moves independently of the crypto market. If Bitcoin is stuck in a downward trend, short sellers sit comfortably in profit. But if Bitcoin reclaims key levels, the panic begins.
Investors are keeping a watch on the $68,000 to $70,000 zone for Bitcoin. This is the “line in the sand.” If BTC breaks definitively above this resistance, MSTR shares will likely gap up instantly, triggering margin calls for the short sellers.
Conversely, if Bitcoin drops below support at $59,000, the short thesis is validated, and the squeeze opportunity fades.
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Key Takeaways
- Strategy has over 30 million shares sold short. This creates a high-pressure setup for a potential short squeeze.
- MSTR is a Bitcoin Proxy. A sudden rise in BTC price above $68,000 could force shorts to cover, driving the stock up aggressively.
The post Strategy (MSTR) Shares Jump 8% Despite Becoming the Most-Shorted $25B+ Stock appeared first on 99Bitcoins.
