MicroStrategy Continues Bitcoin Accumulation Amid Market Slump

Key learning points

  • MicroStrategy has disclosed that it purchased an additional 480 Bitcoin between May 3 and June 28.
  • The company now owns 129,699 Bitcoin.
  • The number one cryptocurrency is currently at a critical support level that could trigger a rebound.

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MicroStrategy has indicated that it is committed to increasing its Bitcoin holdings despite the recent market decline. The business intelligence firm announced on Wednesday that it had bought an additional 480 Bitcoin as the leading cryptocurrency is 71% lower than its all-time high.

MicroStrategy Expands Interests

MicroStrategy has profited from Bitcoin’s price dip.

In a regulatory submission Published on Wednesday, Michael Saylor’s data analytics firm announced that it had purchased an additional 480 Bitcoin at an average price of $20,817 between May 3 and June 28. MicroStrategy spent about $10 million on the coins.

The recent purchase brings MicroStrategy’s holdings to approximately 129,699 Bitcoin, with the company’s average cost base at $30,664. MicroStrategy is the world’s largest corporate Bitcoin holder and Saylor himself has become known for his fervent belief in the asset. At an average price of $30,664, the company has spent approximately $3.98 billion on its Bitcoin holdings.

MicroStrategy’s announcement comes at a pivotal time as the number one cryptocurrency has bounced back nearly 10% since June 26. Bitcoin has had a rocky month, diving below the $20,000 psychological level for the first time since December 2020. November 2021, the price of Bitcoin has fallen by more than 70%.

The Crypto Fear & Greed Index Indicates The Market’s Ongoing Slump Is A State Of “extreme fear” among market participants, given the threat of a stronger correction.

Bitcoin at Key Support

Bitcoin’s hourly chart shows that it has been consolidating within a parallel channel since June 19. Every time Bitcoin has reached the upper limit of the channel in the past 10 days, it has returned to the lower limit. It is then reflected, which is consistent with the characteristics of a channel.

The price correction over the past three days has pushed Bitcoin towards the channel’s lower trendline at $19,830. If this support level continues, Bitcoin bounce back to the upper trendline of the channel at $21,740 or break through this technical formation towards $23,660.

Bitcoin price chart
Source: Trading Display

While MicroStrategy has reiterated its strong belief in Bitcoin, it is unclear whether the asset can hold the $19,830 level as a support. If it fails to hold the decisive level, it could trigger a bearish breakout. The parallel channel width added at the $19,830 level suggests that a breach of the support could result in an 8.8% correction towards $18,070.

Thanks to Bitcoin’s months-long decline, the broader cryptocurrency market has taken a major blow. The global crypto market cap is currently at $935 billion, about 67% of its $3 trillion peak.

Disclosure: At the time of writing, the author of this post owned BTC and ETH.

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