Although Bitcoin (BTC) has seen a rapid recovery in recent days, it has experienced significant declines over the past two consecutive months.
While this situation has revived bear market rhetoric, it has also surfaced that Strategy, the biggest institutional Bitcoin bull, is selling BTC.
Strategies prepare you for a Bitcoin bear market!
Although Michael Saylor denied these sales claims, CryptoQuant said Strategy is preparing for a bear market.
As reported by The Block, CryptoQuant said this week that Strategy established cash reserves of approximately $1.44 billion to cover dividends and debt interest.
CryptoQuant said this cash reserve signals that the company is preparing for a bear market, and that this dual reserve model, which includes both the US dollar and Bitcoin, reduces the risk of being forced to sell Bitcoin during an economic downturn.
At this point, Julio Moreno, Head of Research at CryptoQuant, emphasized that while the creation of USD reserves through this strategy indicates that a sale is likely, a sale is still a last resort and the company will primarily focus on Bitcoin derivatives.
Strategic CFO Andrew Kang said the US dollar reserve is a liquidity risk management tool that is created when mNAV>1. He said Bitcoin’s current level of $93,500 could sustain the company in business and pay dividends for more than three years, and selling Bitcoin could only be used as a last resort.
The bear market has already begun!
CryptoQuant’s Julio Moreno claimed that the bear market period started in early November and said that if the bear market continues, he expects BTC prices to trade in the range of $70,000 to $55,000 next year.
Moreno added that the second number, $55,000, is the “most bearish scenario.”
*This is not investment advice.