On-chain data firm CryptoQuant believes that MicroStrategy’s recent move to set up a $1.44 billion cash reserve signals the company has entered defense mode, indicating that Bitcoin is shifting into a bear market. As buying momentum slows, analysts estimate that Bitcoin may trade in the $55,000 to $70,000 range over the next year. However, CEO Ki Young Ju emphasized that this downturn will not repeat the massive crash seen in 2022.
MicroStrategy shifting from offense to defense? CryptoQuant: Building USD reserves signals market downturn
A few days ago, MicroStrategy announced the establishment of a $1.44 billion USD reserve to pay preferred stock dividends and debt interest.
According to CryptoQuant, this means the company is taking a more conservative outlook on the market, no longer relying on continually issuing new shares to buy Bitcoin, but instead prioritizing one to two years’ cash flow to reduce the risk of being forced to sell Bitcoin during a down cycle:
Establishing a USD buffer indicates the company expects Bitcoin may trade sideways or decline for some time, and that capital markets will be less receptive to additional future share issuances.
He added that this also marks a significant shift from MicroStrategy’s “unlimited BTC buying spree” strategy since 2020.
(MicroStrategy’s bear market survival strategy: from insolvency to restarting the Bitcoin flywheel—can Strategy weather the downturn this time?)
MicroStrategy’s buying shrinks: from 130,000 BTC per month to 135
The report points out that MicroStrategy’s Bitcoin purchases have sharply declined since last year. From 134,000 in November 2024, it dropped to just 9,100 in November this year, and only 135 purchased this month.
CryptoQuant believes this will remove a key source of demand from previous bull markets. However, because the company is now allocating USD and hedging, the market may actually avoid forced BTC sell-offs and liquidity shocks, which could help protect long-term market stability.
(MicroStrategy flywheel fails—can only pay shareholder dividends with Bitcoin? Researchers offer three possible outcomes)
On-chain indicators turn bearish: Bitcoin outlook at $55,000 to $70,000
Head of Research Julio Moreno noted that several technical indicators have turned bearish, with the Bull Score Index dropping to 0—the most bearish level seen since 2022—signaling clearly weakened market momentum.
He stated that the Bitcoin bear market started early last month, and if the trend continues, BTC’s price in 2026 could fluctuate between $55,000 and $70,000, with $55,000 being the most pessimistic scenario.
Limited downside? CryptoQuant CEO: No repeat of 2022 crash, more like broad consolidation
Amidst bearish market sentiment, CryptoQuant CEO Ki Young Ju posted that as long as MicroStrategy holds onto its 650,000 BTC, it is “unlikely” the market will see a repeat of the 2022 -65% crash.
Currently, Bitcoin is down about 25% from its all-time high; even if a bear market truly arrives, it may instead turn into a broader consolidation range.
He stressed that global Bitcoin liquidity and demand is stronger than two years ago, so long-term holders shouldn’t be scared by short-term volatility and should avoid panic selling.
(JPMorgan: MicroStrategy’s decline already prices in index removal risk, Bitcoin target at $170,000)
This article, CryptoQuant sees MicroStrategy switching from offense to defense: Prepping for a Bitcoin bear market, possibly falling back to the $70,000 range, first appeared on Chain News ABMedia.
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