Cryptocurrency concept stocks collectively under pressure, why did MSTR still fall over 5% after the positive news

U.S. stock market’s three major indices rose slightly, but the crypto sector remained sluggish. According to the latest data, MSTR fell over 5.77%, BNC dropped more than 6.73%, and ABTC declined over 4.19%, highlighting a clear divergence between traditional markets and the crypto market. More notably, despite the positive news that MSCI temporarily delayed removing certain stocks from its indices, MSTR still failed to reverse its downward trend. What does this reflect?

The Widespread Decline in Crypto Concept Stocks

Market rises, crypto sector declines

The closing data of U.S. stocks shows an interesting divergence: Dow up 0.48%, S&P 500 up 0.65%, Nasdaq up 0.81%, indicating a modest gain in traditional markets. However, crypto-related concept stocks collectively came under pressure, which is not just an adjustment of individual stocks but a systemic decline across the entire sector.

In comparison, Bitcoin (BTC) fell over 3% during the same period, retreating near $91,100. ETH also dropped 3.6%. This suggests the issue is not with a single stock but with the weakening sentiment across the entire crypto market.

Why is MSTR Still Falling?

The most noteworthy detail is MSTR’s performance. According to recent news, MSCI announced on January 7th that it would temporarily delay index adjustments for digital asset management companies like MicroStrategy. This should have been a significant positive — earlier, the market feared MSTR would be removed from indices due to excessive BTC accumulation.

However, this positive news did not prevent MSTR from declining. This reflects the true market sentiment: investors’ confidence in the overall crypto sector is weakening, and a single positive piece of news is no longer enough to push the stock price up.

The Truth Behind Market Divergence

Whale’s Bearish Signals

On-chain data provides an important reference. According to Coinbob monitoring, a whale address recently established 18 short positions on stocks, with MSTR short positions totaling about $470,000 at an average price of $164, currently with a floating profit of 7.2%. This indicates professional funds are systematically shorting crypto concept stocks.

Interestingly, this whale also holds leveraged short positions on BTC, ETH, and SOL with 20x leverage, totaling approximately $45.64 million, with a floating profit of about $1.3 million. This suggests that not only are they bearish on crypto concept stocks, but they are also shorting mainstream cryptocurrencies.

Dual Pressure from Liquidity and Sentiment

The crypto market faces dual pressures. On one hand, although U.S. tech stocks are rising, the gains are modest, indicating that market risk appetite has not significantly improved. On the other hand, the sentiment within the crypto market itself is deteriorating, and the large-scale short positions established by whales could further intensify downward pressure.

It is worth noting that the ratio of MSTR to IBIT (Bitcoin spot ETF) has rebounded for two consecutive weeks from the support level of 3.0 to 3.11. This indicator generally reflects market expectations of MSTR’s valuation relative to BTC spot. The rebound may suggest a short-term sign of stabilization, but further observation is needed to see if it can hold.

Key Points on Market Outlook

Based on current data, the decline in crypto concept stocks is more a reflection of market sentiment rather than deteriorating fundamentals. MSCI’s positive decision indicates increasing policy recognition of the crypto ecosystem, but it will take time to translate into investor confidence.

In the short term, the key is whether BTC can hold the support around $91,000. If this critical level is broken, crypto concept stocks may face greater downside pressure. Additionally, monitoring whether whales continue to expand their short positions will directly impact the market’s downward potential.

Summary

The widespread decline in crypto concept stocks reflects fragile market sentiment; even positive signals like MSCI’s decision are insufficient to reverse the short-term downtrend. MSTR, as one of the most important stocks in the crypto ecosystem, serves as a barometer of market confidence. The large-scale short positions established by whales indicate professional funds are systematically shorting, which could exacerbate downward pressure. Moving forward, close attention should be paid to BTC’s support levels and whale short activity, as these will determine when the crypto market can find a bottom.