In an interesting turn of events over the weekend, Bitcoin saw a sudden cash crunch, with its price dropping to $76,000. Having not yet recovered from their weekday losses, BTC investors must be feeling strong, as the unusual weekend volatility brought them down.
One of these investors could be Michael Saylor, whose company, Strategy, was briefly underwater following the recent Bitcoin price drop. The company’s Bitcoin holding cost base of around $76,000 was tested as the record level liquidation rocked the crypto market.
BTC Holdings Strategy on the Edge of Unrealized Losses
Over the past few months, the price of Bitcoin has struggled to stay above key levels, including the 360-day moving average and short-term holders (STH) are aware of the price. Interestingly, the first cryptocurrency added another level of cost base to this growing list during the recent price decline.
Strategy, the largest Bitcoin holder, briefly went into the red after the price of BTC fell below the holding cost base of around $76,000. The company, which currently holds more than 712,000 BTC, has had its share of problems in recent months, with its stock price (now at $143) dropping from the $455 spot.
Source: @JA_Maartun on X
Although the price of Bitcoin is now about 2.5% above the average cost base of this strategy, there is still a real threat to the first cryptocurrency. In the event that BTC falls and holds below this level, the Bitcoin treasury company will be sitting on huge unrealized losses, which could lead to a further decline in market confidence.
Over the years, there have been no indications that the Strategy will liquidate its Bitcoin holdings if it falls into unrealized losses. It is interesting that the chairman and founder of Strategy, Michael Saylor, posted on the X platform about the decline, saying that the company was “built for a long time.”
However, there may be more volatility in play, especially as continued trading below the average cost base may invite scrutiny of the company’s Bitcoin acquisition strategy.
Bitcoin Price Bottom May Take Months to Form
Julio Moreno, head of CryptoQuant research, warned investors to stop looking for bottoms after the new leg drops. According to on-chain experts, the recent decline of Bitcoin to less than $ 76,000 is not a correction of the bull market, since the bear phase started back last November.
Moreno wrote in a post on X:
Indicators that help find lows in a bull market are currently inactive.
As of this writing, the price of BTC stands at around $78,070, which represents a drop of more than 6% in the last 24 hours. According to data from CoinGecko data, the first cryptocurrency fell by about 12% during the weekly period.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from Michael Saylor/X, chart from TradingView
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