Bitcoin (BTC) Crashes 13% as Saylor Buys the Dip

Bitcoin (BTC) experienced a sudden decline during the weekend when it dropped more than 13% and temporarily fell under Strategy’s average acquisition cost. The drop in value caused the company to experience temporary unrealized losses because its extensive BTC holdings reached a point of loss. Michael Saylor who serves as the co-founder and executive chairman of Strategy exhibited complete trust in the company’s future.

Saylor posted “More Orange” on X together with a graph that displays Strategy’s BTC buying activities which began in August 2020. The phrase has become his signature hint that the company has added, or plans to add, more BTC to its balance sheet.

Source: Michael Saylor on X

If confirmed, this would mark Strategy’s fifth BTC purchase this year. The company made its biggest purchase on January 20 when it purchased 22,305 BTC. The company possesses more than 712,647 BTC which establishes it as the largest corporate BTC treasury worldwide because its total assets reach approximately $55 billion.

Also Read: MicroStrategy Holds 712K Bitcoin As Michael Saylor Hints at New Bitcoin Buy

Bitcoin (BTC) Slump Tests Strategy’s Long-Term Conviction

The short-term market fluctuations have not affected the long-term success which Strategy achieved through its Bitcoin investment. The company achieved sustained profitability for almost five years because of its initial investments in BTC at reduced prices which were followed by the cryptocurrency’s extended price increase. BTC recovered to approximately $76,765 after the weekend sell-off while the price remained above Strategy’s acquisition cost of $76,040.

The incident demonstrates a typical trend which occurs in Bitcoin markets because it shows extreme price declines which get followed by fast price recoveries and dedicated investors who choose to purchase during price drops.

Bitcoin Sentiment Weakens Amid Macro Shock

The recent drop in Bitcoin occurred after widespread financial market turmoil which began when U.S. President Donald Trump selected former Federal Reserve governor Kevin Warsh to become the next Fed chair. Analysts consider Warsh to have more hawkish monetary policy beliefs than Jerome Powell because he supports stricter monetary policies and decreased inflation rates while opposing quantitative easing.

The announcement caused risk assets to experience extreme volatility. Gold and silver prices dropped more than 10% after reaching their highest levels during previous months. The S&P 500 index experienced a decrease of approximately 0.43%. BTC demonstrated its typical behaviour by reacting to changes in liquidity conditions and market expectations for interest rate movements.

The current state of market sentiment toward cryptocurrencies shows a decline. Changpeng Zhao, “CZ,” who used to serve as CEO of Binance now expresses decreased trust in his Bitcoin super-cycle prediction which he made three weeks ago. The Crypto Fear & Greed Index reached its lowest point in more than one month when it dropped to 14 out of 100, which showed extreme fear.

Changpeng Zhao

The historical record demonstrates that periods of negative sentiment usually lead to economic recovery. Bitcoin price fluctuations create investment opportunities for Saylor and other investors.

Also Read: Strategy Maintains Bitcoin Position as Market Correction Tests Investor Confidence