Strategy (NASDAQ: MSTR) stock price is gaining attention after the STRC preferred stock soared to its highest price since June 1.
STRC’s gains have fuelled bullish forecasts for the MSTR stock, with one analyst noting that the price could reach $185.
Meanwhile, the recent drop in Bitcoin has shrunk Strategy’s unrealized profit on its BTC holdings to $1.3 billion.
Strategy’s STRC Surges Closer to Par
The STRC preferred stock closed trading at $98.64 on September 11. The stock is now up by 38% since June 26 and only $1.36 below its par value.
The gains seen by this preferred stock come amid ongoing buybacks by Strategy in an attempt to push it back to the par value of $100. Strategy has been funding the buybacks by selling MSTR stock and Bitcoin.
Recently, Strategy purchased $176 million worth of STRC shares, as earlier reported by CoinGape.
Strategy has now repurchased $811.5 million worth of STRC shares since it initiated the buy-back program in July after STRC dropped to a record low of $71.
Analyst Forecasts MSTR Stock Rally to $185 Amid STRC’s Recovery
One analyst on X notes that if STRC can get back to the par value of $100 or trade above it, Strategy will get access to a “much larger preferred equity machine” that they can use to raise more capital, and this could bode well for MSTR stock.
The analyst also noted that Strategy has attained an mNAV of 1.11x. He notes that this mNAV will likely grow as the market gains confidence in Strategy’s ability to raise capital through preferred stocks and purchase more Bitcoin.
“A conservative 1.5x mNAV would put $MSTR around $185 based on today’s NAV. And that’s before accounting for the additional Bitcoin Strategy could accumulate if STRC becomes a reliable capital-raising machine,” the analyst opined.
The analyst’s bullish outlook comes after Canaccord increased its MSTR stock target from $175 to $179 on optimism that Bitcoin price will recover.
Crypto Stocks Under Pressure Amid Looming Rate Hikes
The bullish outlook on MSTR stock comes despite surging odds that the Federal Reserve will hike interest rates at the September 16 FOMC meeting.
The release of the US CPI data on September 11 that revealed a 0.33% month-over-month surge in core CPI pushed the odds of the Fed hiking interest rates to 79%, per data from CoinGape prediction markets.
The rising odds caused a surge in volatility in MSTR stock, which reached an intraday high of $137 on September 11 before closing trading at $130.
Other crypto stocks, including Coinbase (COIN) and Circle (CRCL) stocks also posted slight gains of 1.73% and 0.31% after dropping from their respective highs.
MSTR Stock Tests 200-day SMA Resistance
The price of MSTR stock tested the resistance at the 200-day SMA of $138 on September 11. However, the shares did not close above this resistance after the price retreated because of Fed rate hike fears.
If the upcoming FOMC meeting weakens the buying pressure, MSTR stock price could drop to the 100-day SMA of $126.
Still, the CMF reading of 0.17 suggests that the buying pressure remains higher than the selling pressure, and this could support a move to $138.
However, if the uptrend fails and MSTR stock price closes below the psychological support at $130, the stock could drop to the August 21 low of $117.
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