MicroStrategy Continues Bitcoin Accumulation Amid Market Slump

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MicroStrategy Continues Bitcoin Accumulation Amid Market Slump
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key takeaways

MicroStrategy revealed that it purchased an additional 480 BTC between May 3 and June 28. The company now holds 129,699 bitcoins. The number one cryptocurrency is currently at a key support level that could spark a rally.

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MicroStrategy has said it remains committed to increasing its bitcoin holdings despite the recent market downturn. The business intelligence firm announced Wednesday that it bought an additional 480 bitcoins as the leading cryptocurrency traded 71% below its all-time high price.

MicroStrategy Overweight

MicroStrategy has taken advantage of the drop in Bitcoin’s price.

In a regulatory filing released Wednesday, Michael Saylor’s data analytics firm revealed that it bought an additional 480 bitcoins between May 3 and June 28 at an average price of $20,817. MicroStrategy spent about $10 million on these coins.

Ledger

The recent purchases brought MicroStrategy’s Bitcoin holdings to around $129,699, with the company’s average cost basis at $30,664. MicroStrategy is the world’s largest holder of enterprise bitcoin, and Saylor himself is known for his strong belief in the asset. At an average price of $30,664, the company spent about $3.98 billion on its bitcoin holdings.

MicroStrategy’s announcement comes at a pivotal time, as the top-ranked cryptocurrency has retraced nearly 10% since June 26. Bitcoin has had a volatile month, falling below the key psychological $20,000 level for the first time since December 2020. Since November 2021, the price of Bitcoin has fallen by more than 70% since $69,000.

The Crypto Fear and Greed Index suggests that the ongoing market downturn has created a state of “extreme fear” among market participants, given the threat of a larger correction.

Key Supported Bitcoins

The hourly chart of Bitcoin shows that it has been consolidating within a parallel channel since June 19. Every time Bitcoin has reached the upper limit of the channel over the past 10 days, it has reversed to the lower limit. After that, there was a rebound, which is consistent with the characteristics of the channel.

The price correction over the past three days has pushed Bitcoin to the lower trendline of the channel at $19,830. If this support holds, Bitcoin could rally to the channel’s uptrend line at $21,740 or break this technical pattern to $23,660.

Source: TradingView

Although MicroStrategy once again expressed strong confidence in Bitcoin, it is unclear whether the asset can hold the support at $19,830. Failure to hold decisive levels could trigger a bearish breakout. An increase in the width of the parallel channel to the $19,830 level suggests that a break above the support could lead to an 8.8% correction towards $18,070.

The broader cryptocurrency market has been hit hard by bitcoin’s months-long decline. The global cryptocurrency market capitalization is currently $935 billion, or about 67% of its peak of $3 trillion.

Disclosure: At the time of writing, the author of this feature owns BTC and ETH.

For more key market trends, subscribe to our YouTube channel and get weekly updates from our Chief Bitcoin Analyst, Nathan Batchelor.

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