Benchmark and TD Cowen on Monday pushed back against death spiral fears surrounding Strategy Inc. (NASDAQ:MSTR) as the stock surges 8% on Bitcoin’s (CRYPTO: BTC) recovery above $66,000.

Benchmark Says Strategy Has Several Buffers Before Bitcoin Sales Become Necessary

Benchmark analyst Mark Palmer called the death spiral narrative a story that skips several steps. 

Strategy’s $1 billion cash reserve must be depleted before any meaningful Bitcoin sales enter the conversation, and the perpetual preferred stock (NASDAQ:STRC) carries no hard maturity date that would trigger accelerated selling.

“The death-spiral story assumes that Strategy is one bad week from selling Bitcoin, and it skips several steps to get there,” Palmer wrote. 

“The company would have to move through a long sequence of failures before its Bitcoin reserve, currently valued at almost $55 billion, would even enter the conversation,” he added.

Moreover, Strategy sold 32 Bitcoin for $2.5 million between May 26 and May 31 to fund STRC dividend distributions, its first sale since December 2022. 

The company followed that with a 1,587 Bitcoin purchase for $100 million last week at an average price of $63,024, bringing total holdings to 846,842 BTC.

TD Cowen Says STRC Has Preserved Capital Even During Sharp Bitcoin Drawdowns

TD Cowen analysts Lance Vitanza and Jonnathan Navarrete added that STRC dividend obligations remain manageable given current reserves, arguing the preferred stock has actually proven its value during volatility.

“STRC has materially dampened volatility across drawdowns, offering positive or near-flat returns even during periods when BTC experienced significant declines,” TD Cowen wrote.

“This dynamic supports the positioning of STRC as a capital preservation and income vehicle, in contrast to BTC’s high-volatility growth profile.” Both firms carry a Buy rating on MSTR.

MSTR Clears First Fibonacci Level With $144 to $148 Cluster As The Real Test

MSTR cleared the 0.236 Fibonacci level at $132.51 Monday, the first meaningful structural reclaim since May’s $195 peak. 

The Fibonacci recovery ladder is now clearly mapped with the full bearish EMA stack overhead. 

The 0.382 Fib at $144.50 coincides almost exactly with the 50 EMA at $148.79 and Supertrend at $148.04, making that cluster the make-or-break zone for this recovery.

Closing above $144.50 targets $154.19 then $163.88. Losing $132.51 fades the momentum and retests the June lows at $113.

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