An analyst has pointed out how the latest Bitcoin purchase by Microstrategy could explain a pattern observed in this metric recently.
Microstrategy’s Purchase Behind Recent Positive Coinbase Premium?
Yesterday, Michael Saylor’s Microstrategy announced that it has acquired an additional 5,445 BTC at a cost of $147.3 million. In a post on X, Maartunn, the CryptoQuant Netherlands community manager, has shared some key charts related to the company’s shopping spree.
First, here is how the timeline of Microstrategy’s buys and sells lines up against the cryptocurrency’s price during the past few years:
The purchases made by the company over the years | Source: @JA_Maartun on X
An interesting pattern that is perhaps visible in this graph is that Microstrategy’s purchases have often come near tops in the asset. It should be noted, however, that the day the company makes these announcements isn’t when they acquire the coins, but rather over the preceding weeks or months.
The latest buying spree from the firm, for example, took place between August 1 and September 24, at an average price of $27,053 per token of the cryptocurrency. This would perhaps explain why uptrends have seemingly ended with their purchase reveals.
Not only does the market lose the 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 the Bitcoin Coinbase Premium Gap, which keeps track of the difference between the BTC prices on Coinbase and Binance.
The value of the asset had been highly positive a week ago | Source: @JA_Maartun on X
Back then, the indicator’s value was highly positive, as is visible in the graph. This implied that there was a significant amount of buying taking place on Coinbase.
The source of the buying pressure was unknown then, but after the Microstrategy reveal, Maartunn has quote reposted the graph, noting that Saylor’s brainchild had been behind it.
With this buying pressure now gone from the market, it’s unclear how the price would react going forward, but if the past is anything to go by, it’s unlikely to show any climb in the near future.
Following the latest purchase, the total holdings of the firm have grown to 158,245 BTC. In all, Microstrategy has invested a whopping $4.68 billion into the asset.
How the holdings of the firm have changed over the past few years | Source: @JA_Maartun on X
These massive holdings, however, are being held at a loss at the moment, as the below chart for the company’s unrealized profit and loss shows.
The metric's value appears to be negative right now | Source: @JA_Maartun on X
From the graph, it’s visible that Microstrategy’s Bitcoin holdings had come into a slight profit earlier in the year, but with the recent decline in the cryptocurrency’s value, the company’s stack has once again gone underwater.
At present, the valuation of the firm’s holdings stands at $4.15 billion, which implies that it’s carrying an unrealized loss of more than $550 million.
Bitcoin has observed a fall of more than 3% during the past week as its price has now come down to $26,200.
Bitcoin has seen some decline recently | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com