Bitcoin’s latest recovery attempt lost momentum as continued weakness in Strategy’s preferred stock STRC ignited concerns about the company’s Bitcoin-linked capital structure. Analyst Michaël van de Poppe noted that BTC appeared poised for a breakout before the move stalled, and he stressed that STRC must rebound quickly to restore confidence. Without it, the negative narrative could deepen, dragging down both Bitcoin and Strategy.
STRC, the Variable Rate Series A Perpetual Stretch Preferred Stock, plunged from its $100 par level to a record low of $72.60, symbolizing broader stress among crypto-focused preferred stocks. Other names followed: BitMine Immersion Technologies’ BMNP slid to $81.40, Strive’s SATA fell to $83.53, and additional Strategy vehicles like STRK, STRD, and STRF also imploded. The selloff comes amid a brutal crypto market downturn that saw Bitcoin drop from $126,300 to $58,000 and Ethereum crash from nearly $5,000 to $1,500, generating billions in unrealized losses for these accumulation companies.
The fundamental fear is that firms like Strategy, Strive, and BitMine may be forced to raise cash to cover dividend payments or even halt their Bitcoin accumulation. Strategy recently sold equity to raise $300 million, bringing its cash reserves to $1.4 billion – insufficient to cover a full year of dividends. More alarming, Strategy broke its long-standing policy never to sell Bitcoin, making its first sale weeks ago. With an average BTC purchase price of $68,000, further sales would lock in losses and amplify downward pressure on the market.
Amid these conditions, analyst PlanB highlighted that previous Bitcoin bear markets bottomed at the realized price, which currently sits near $53,000 – exactly where the 200-week geometric average also lies. The combination of STRC weakness, forced selling risks, and this technical level revive the specter of a drop to that zone if the rebound fails to hold. While bulls like Tom Lee, Michael Saylor, and Vivek Ramaswamy hope for a swift recovery, the crypto market faces stiff competition from surging stock markets, which continue to siphon funds from crypto ETFs.
