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$BTC has now successfully closed back above its 200-day moving average. It had spent the past two weeks trying to recover from the crash earlier in the month, and has now reclaimed this critical level.
The next target is the 128-day-moving average - a key moving average that typically acts as a support level in bull markets. We expect a significant return to confidence once $BTC can reclaim the 128-day moving average. That moving average is currently at $95,000.
Figure 1: Bitcoin has now reclaimed its 200-day moving average.
$BTC has significant ground to make up though as it remains -14.19% down over the past three months.
Figure 2: $BTC has trended down over the past three months.
But with evidence that traders have become pessimistic, as shown by the negative funding rates (red bars) on the chart below, we may have reached a local bottom in $BTC price.
This has undoubtedly been the case previously this cycle when negative funding rates have appeared and also in prior bull market cycles.
Figure 3: Bitcoin Funding Rates turning negative marking local lows.
The Big Story: Strategy raises $711M as Saylor Hints at new bitcoin buy
Key Highlights:
- Strategy aims to raise $711 million to expand its Bitcoin holdings and support operations.
- The preferred stock offers a 10% annual dividend and redemption rights under certain conditions.
Strategy, led by Michael Saylor, announced plans to raise approximately $711 million through a Series A Perpetual Strife Preferred Stock (STRF) offering. Proceeds will primarily fund additional Bitcoin purchases, pushing the company’s holdings beyond 500,000 BTC. It currently holds 499,226 BTC.
Figure 4: (Micro)Strategy Holdings, Stock performance, Price, and % of supply.
Strong investor interest prompted an increase in the offering from 5 million to 8.5 million shares, priced at $85 each. The preferred shares carry a 10% annual cumulative dividend based on a $100 per share value.
The shares carry a $100 liquidation preference, adjusted daily based on market factors. Strategy can redeem all shares if outstanding shares fall below 25% of the initial issue or in certain tax events. Shareholders may also request repurchase if a significant corporate change occurs.
This offering is part of Strategy’s 21/21 plan—a $42 billion initiative split evenly between equity and debt—to aggressively grow its Bitcoin reserves. The company, which now holds around 246,000 BTC, has already made significant progress toward that target.
Funded by convertible notes and other instruments, Strategy’s Bitcoin holdings currently represent 2.38% of the total supply, reinforcing its position as the leading institutional holder of bitcoin.
As a result of its Bitcoin Treasury strategy, the company has continued to significantly outperform other major stocks, as well as Bitcoin since it’s adoption of the strategy:
Figure 5: $MSTR stock outperformance since the company's adoption of Bitcoin.
You can view our new dashboard on (Micro)Strategy showing key charts and data that (Micro)Strategy uses to report on their KPI performance. Check it out here.
Live Chart Review: $MSTR Key Moving Averages
Figure 5: MSTR Key Moving Averages
What it is
$MSTR share price with key moving averages overlaid:
- 50-day moving average (blue)
- 100-day moving average (red)
- 200-day moving average (purple)
How it is useful for Bitcoin investors
During this and the previous Bitcoin bull market, $MSTR has consistently stayed above the 200-day moving average. Only in late 2021 did $MSTR price start to trend below the purple line of the 200DMA.
During the recent $BTC crash, $MSTR price also tumbled but stopped at the 200-day moving average, reversed, and has since rallied up.
The Bitcoin Magazine Pro Team.