Key Notes
- Bitcoin dropped below $90,000 as traders watch Strategy’s stock reaction.
- MSTR briefly traded under the value of its Bitcoin reserves.
- Rising fears of index exclusion and forced selling add new pressure.
Bitcoin’s fall below $90,000 this week has resulted in concerns for Strategy, the world’s largest corporate holder of the asset. Traders are wondering whether the company’s stock, MSTR, can handle another downturn if BTC
BTC
$86 804
24h volatility:
0.1%
Market cap:
$1.73 T
Vol. 24h:
$74.78 B
moves closer to its long-term average purchase price.
At the time of writing, Bitcoin is trading near $86,900, a 21% drop over the past month. Some market watchers argue the drop signals the first stage of a bear market. However, others see it as a normal pause before a potential year-end BTC rally.
Bitcoin Price Slides as Sellers Take Charge
Analyst Jason Pizzino recently noted that Bitcoin has fallen 10% since Nov. 28 after facing rejection at $93,000. He added that volume increased during the pullback, a sign that sellers were far more active than in prior weeks.
Pizzino believes that the market still has a chance to stage a short rebound if buyers manage to regain control.
Notably, Bitcoin’s fall below its 200-day moving average has often led to long waiting periods before a recovery. Historically, this period stretched for two to three months.
The analyst suggests that late January to early February could be an important time for any attempt to return above that long-term trend.
Strategy Faces Its Toughest Test Yet
Amid this tough period, pressure on Strategy has intensified. The company’s market cap currently sits around $45.7 billion, over $10 billion below the value of its Bitcoin holdings.
As of Dec. 2, Strategy holds around 650,000 BTC worth roughly $55.9 billion. Even after subtracting its $8.2 billion debt load, the company still holds more Bitcoin than the market is currently assigning to its entire operation.
MSTR has seen a 57% drop in its value since early October. The company recently formed a $1.44 billion cash reserve for dividends. Moreover, for the first time in years, the CEO Phong Le acknowledged that Strategy could sell Bitcoin under extreme conditions.
Meanwhile, worries are also building around a possible removal from major global stock indices, which could force up to $8.8 billion in selling, according to JPMorgan.
With an average Bitcoin purchase price of $74,436, Strategy is not much above break-even. One deeper downturn would erase years of accumulated gains for the company.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
Parth Dubey on LinkedIn
Source: https://www.coinspeaker.com/bitcoin-saylor-strategy-risk-mstr-cap-lower-btc-holdings/
