One analyst has pointed out how Microstrategy’s latest bitcoin purchase could explain a recently observed pattern in this metric.
Is Microstrategy Buying Behind Coinbase’s Recent Positive Premium?
Yesterday, Microstrategy by Michael Saylor Announced which has acquired an additional 5,445 btc at a cost of $147.3 million. in a mail On X, CryptoQuant Netherlands community manager Maartunn has shared some key charts related to the company’s buying spree.
First, here’s how the timeline of Microstrategy’s purchases and sales lines up with the price of the cryptocurrency over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Microstrategys-Bitcoin-Purchase-Explains-This-Recent-Pattern.jpeg" alt="Buying and Selling Microstrategy bitcoin” width=”4096″ height=”2580″/>
The purchases made by the company over the years | Source: @JA_Maartun on X
An interesting pattern perhaps visible on this chart is that Microstrategy’s buying has often approached the asset’s highs. It should be noted, however, that the day the company makes these announcements is not when it acquires the coins, but rather during the weeks or months prior.
The company’s latest buying spree, for example, took place between August 1 and September 24, at an average price of $27,053 per cryptocurrency token. This would perhaps explain why the bullish trends seemingly ended with his buying revelations.
Not only does the market lose notable buying pressure, but some other investors may also react to the news by selling, thus causing a bearish effect on the price.
About a week ago, Maartunn shared a chart for bitcoin Coinbase Premium Gap, which tracks the difference between btc prices on Coinbase and Binance.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/1695756063_162_Microstrategys-Bitcoin-Purchase-Explains-This-Recent-Pattern.jpeg" alt="bitcoin Coinbase Premium Gap” width=”4096″ height=”2580″/>
The value of the asset had been highly positive a week ago | Source: @JA_Maartun on X
At that time, the value of the indicator was very positive, as seen in the graph. This implied that a significant amount of purchases were being made on Coinbase.
The source of the buying pressure was unknown at the time, but after Microstrategy’s revelation, Maartunn republished the chart, noting that Saylor’s creation had been behind it.
Now that this buying pressure has disappeared from the market, it is unclear how the price would react in the future, but if the past is anything to go by, it is unlikely to show any increase in the near future.
Following the latest purchase, the company’s total holdings increased to 158,245 btc. In total, Microstrategy has invested a whopping $4.68 billion in the asset.
<img decoding="async" loading="lazy" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/1695756063_818_Microstrategys-Bitcoin-Purchase-Explains-This-Recent-Pattern.jpeg" alt="Microstrategy bitcoin Holdings” width=”4096″ height=”2580″/>
How the holdings of the firm have changed over the past few years | Source: @JA_Maartun on X
However, these massive holdings remain at a loss at the moment, as the company’s unrealized profit and loss chart below shows.
<img decoding="async" loading="lazy" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/1695756063_843_Microstrategys-Bitcoin-Purchase-Explains-This-Recent-Pattern.jpeg" alt="bitcoin Micro Strategy Loss” width=”4096″ height=”2580″/>
The metric's value appears to be negative right now | Source: @JA_Maartun on X
From the chart, you can see that Microstrategy’s bitcoin holdings had made a slight gain earlier in the year, but with the recent drop in the value of the cryptocurrency, the company’s stack has once again taken a dive.
Currently, the company’s holdings are valued at $4.15 billion, meaning it has an unrealized loss of more than $550 million.
btc Price
bitcoin has seen a drop of over 3% over the past week as its price has now dropped to $26,200.
<img decoding="async" loading="lazy" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/5pdMOuek/" alt="bitcoin price chart” width=”1534″ height=”876″/>
bitcoin has seen some decline recently | Source: BTCUSD on TradingView
Featured Image from iStock.com, Charts from TradingView.com, CryptoQuant.com
