MicroStrategy announced on Monday that it purchased an additional 5,262 Bitcoins, worth $561 million, between December 16 and 22. This is the seventh consecutive week the company has purchased Bitcoins, ahead of its inclusion in the Nasdaq-100 index. The average price of each Bitcoin in this purchase was approximately $106,662.
The company said the bitcoin was purchased with proceeds from the sale of its own stock. Last week, MicroStrategy sold 1,317,841 shares, raising about $561 million. As of December 22, the company had about $7 billion in shares outstanding under its current sales agreement, suggesting the potential for additional funding from future stock sales.
The latest Bitcoin purchase contributed to the company’s impressive Bitcoin returns of 47.4% QTD and 73.7% YTD. MicroStrategy now owns a total of 444,262 BTC worth approximately $27.7 billion, at an average purchase price of $62,257 per coin.
MicroStrategy's stock has been on a tear, rising 476% year to date, making it one of the best-performing stocks on the Nasdaq this year. That performance has helped the company join the Nasdaq-100 index, effective when markets open today.
Nasdaq announced a restructuring of the Nasdaq-100 index on December 13, adding MicroStrategy along with Palantir Technologies and Axon Enterprise.
The market reacted positively to the news, with MicroStrategy's stock price rising 11.5% to $364 at Friday's close.
MSTR Stock Price Chart | Source: Yahoo Finance
Bitcoin Price Faces Risk of Correction
After a lackluster trading week, Bitcoin price is struggling to hold support in the mid-$90,000 region as the holidays approach, after falling to $95,281 at press time.
“Bitcoin has confirmed a bearish engulfing candlestick pattern,” analyst Rekt Capital said.
BTC/USD 1-Week Chart | Source: Rekt Capital/X
Rekt Capital warns that BTC/USD has “lost” a key support level on the weekly chart, signaling the end of a five-week bull run.
“If the price rallies and reaches these old support levels, they could become new resistance. This happens because those who bought at the old support levels could sell, preventing the price from continuing to rise. This would confirm the continuation of the downtrend.”
BTC/USD 1-Week Chart | Source: Rekt Capital/X
Some other analysts have predicted that Bitcoin price could fall to its previous peak in March of $74,000.
“In previous cycles, a -30% drawdown in a bull market was pretty normal,” said trader Josh Rager. “While the current price action isn’t ideal, it’s not too bad either. If the price drops to $75,000 right now, the drawdown would only be -30%.”
BTC/USD Chart | Source: Jelle/X
Trader Jelle also compared Bitcoin's price performance last year and predicted that the price could recover after “a few more difficult weeks.”
Holidays present many challenges for investors, especially due to extended “after-hours” trading hours. The lack of liquidity during the holidays can increase price volatility, which can be accompanied by sharp spikes or drops.
Looking beyond the liquidity market, commentator Mark Cullen is now eyeing two key price levels that could have a major impact on the market in 2025. The first is the $115,000 threshold, which could put pressure on the bulls.
“Liquidity is accumulating at $115,000 and below $80,000. The big question is: Which level will be attacked first? Will the market see a major change when both of these levels are tested?”
The chart below shows two areas where the market could see heavy liquidation if price hits these levels.
BTC/USD chart with order book liquidity data | Source: Mark Cullen/X
In the event that the price drops to $80,000, it would be a normal bull market correction, similar to past Bitcoin price cycles.
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