In an interesting development over the weekend, Bitcoin liquidity skyrocketed and the price fell to $76,000. Bitcoin investors who barely recovered from weekday losses must be feeling like they’ve done it as weekend volatility, unusually, fell even further.
One of those investors would be Michael Saylor. His company Strategy temporarily went out of business following Bitcoin’s recent price drop. The company’s average cost base of around $76,000 in Bitcoin holdings was put to the test as record levels of liquidations rocked the cryptocurrency market.
Strategy’s BTC holdings are on the verge of unrealized losses
Over the past few months, Bitcoin price has struggled to rise above important levels, including the 360-day moving average and realized short-term holders (STH) price. Interestingly, this top-of-the-line cryptocurrency added yet another cost base level to this growing list during its recent price drop.
Strategy, the largest corporate Bitcoin holder, temporarily fell into the red as the price of BTC plummeted below its holding cost of around $76,000. The company, which currently holds over 712,000 BTC, has struggled in recent months, with its stock (currently $143) plummeting from its local high of $455.
Source: @JA_Maartun on X
Although the price of Bitcoin is currently around 2.5% above the average cost basis for this strategy, there are still real threats to this premier cryptocurrency. If BTC were to fall below this level, Bitcoin treasury companies would be left with huge unrealized losses, which could further erode market confidence.
Over the past few years, there has been no indication that Strategies would sell its Bitcoin holdings at unrealized losses. Interestingly, Strategy Chairman and Founder Michael Saylor posted on the X Platform in connection with the recession, stating that the company is “built for the long term.”
However, there may be larger dynamics at play, especially as continued trading below its average cost basis could lead to scrutiny of the company’s Bitcoin accumulation strategy.
Bitcoin price may take several months to reach bottom
Julio Moreno, Head of Research at CryptoQuant, warned investors to stop looking for the bottom after the new downside. According to on-chain experts, Bitcoin’s recent fall below $76,000 is not a bull market correction, as the bear phase started back in November of last year.
In a post about X, Moreno wrote:
Indicators that help find the bottom of a bull market are useless right now.
As of this writing, the price of BTC is around $78,070, reflecting a decline of more than 6% in the past 24 hours. The premier cryptocurrency is down about 12% on a weekly basis, according to CoinGecko data.
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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