Leveraged ETF for short selling strategy stocks updates its bottom price | CoinDesk JAPAN

• Defiance Daily Target 2x Short MSTR ETF (SMST) has set a new all-time low for four consecutive trading days, and fell by 7.58% on July 14.
• The price of Bitcoin has exceeded $122,000, setting a new all-time high, which has caused the stock price of Strategy to rise by more than 3%.
• Defiance Daily Target 2x Short MSTR ETF (MSTX) rose on the 14th.

People who opposed investment in strategies seem to be reaching their limits of patience and are gradually withdrawing from bearish investments.

On July 14, an American-listed ETF that provides leveraged bearish exposure to the stocks of Strategy, a company holding Bitcoin (BTC), recorded an all-time low amid approaching record trading volume.

According to TradingView, the price of the Defiance Daily Target 2x Short MSTR ETF listed on Nasdaq with the ticker symbol SMST fell by 7.58% to $18.17 on the 14th, marking the fourth consecutive day of hitting an all-time low.

This decline occurred with a trading volume of 2.88 million units, marking the second highest volume recorded in the past.

[SMST daily chart: TradingView]

Bears Retreat as BTC Soars

The sharp drop in SMST's high trading volume indicates that the bears are surrendering and giving up, retreating from the market.

A past low with high trading volume is usually a sign of capitulation. Market participants succumb to the relentless bearish trend, liquidating all positions and giving up hope for a recovery. Such price fluctuations often indicate the peak of a bear market, that is, the bottom.

The price of Bitcoin recorded a new all-time high of over $122,000 during Asian trading hours on the 14th, showing bullish signs across all cryptocurrency-related stocks. Subsequently, the stock price of the strategy rose by more than 3%, reaching $456, the highest since November.

Leverage-based Bearish Investment

The 2x short ETF aims to achieve -200% of the daily price movement of the strategy stock, meaning a negative 2x investment result every day. In other words, this is a leveraged bearish bet.

However, the price of this ETF exceeded $2,000 on the set date in August last year, but has since been on a downward trend, with the only temporary increase from $1,600 to $2,368 in late August last year, primarily showing a downward trend. According to VettaFi, as of July 11, this fund had a net inflow of $8.2 million (approximately 1.189 billion yen, based on an exchange rate of 145 yen to 1 dollar) over the past six months.

The stock price of the strategy rose significantly from $100 to over $440 during the same period. The strategy is the world's largest publicly traded company holding Bitcoin, boasting a holding of 601,550 BTC as of the time of writing.

2x Long ETF Rises

Defiance Daily Target 2x Short MSTR ETF (MSTX) rose to nearly $50 on the 14th, marking the highest point since January 24. The trading volume increased for four consecutive days, reaching 9.2 million units.

According to VettaFi, as of the 11th, MSTX has seen a net outflow of over $175 million (approximately ¥25.375 billion) in the past six months.

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