Bitcoin (BTC) is trading within a bear market pattern and is predicted to head towards the sub-$50,000 region, or about 30% below current levels. But Michael Saylor’s strategy could undermine the bears’ plans.
Important points:
Bitcoin has avoided a bear flag breakdown for weeks as strategies continue to buy BTC.
The current setup is similar to Bitcoin’s 2018 bottom when a bearish pattern failed and caused a reversal.
Can the strategy’s BTC purchases offset weak technicals?
Typically, a bearish flag remains in a bearish continuation pattern because there is not enough demand to overcome the broader downtrend.
But in the case of Bitcoin, strategies are taking supply from the market faster than miners can replace it.
Since March 2nd, Strategy’s Bitcoin holdings have increased by 46,233 BTC, but miners have only produced around 16,200 BTC during the same period, meaning the company has absorbed nearly three times the new supply.
Much of that demand came through STRC, Strategy’s floating rate preferred stock. When STRC held a par value near or above $100, Strategy continued to issue shares and accumulate BTC.
For example, last week, Strategy raised $102.6 million through the sale of STRC to fund the purchase of over $330 million worth of Bitcoin. Since then, BTC price has increased by over 6.65%.
From March 9th to 13th, STRC’s sales raised approximately $776 million, enough to buy over 11,000 BTC, and Bitcoin rose over 7% even as the S&P 500 fell 1.6%. During the same period, BTC price increased by more than 10.5%.
However, when STRC fell below par in mid-March, the pace of issuance slowed. The previous below-par events have coincided with BTC’s 25% to 40% decline, including a nearly 40% drop in the three weeks following the pause in January.
Long-term Bitcoin holders and whales drove much of the selling.
Could rise to $110,000 due to bear flag failure
Bitcoin remains within the bear flag after the selloff, but this pattern will start to break if the price breaks above the upper trendline near the mid-$70,000s.
This breakout would override any immediate bearish continuation settings and shift focus to a bullish reading target around $108,000-$110,000.
A similar pattern failure occurred near Bitcoin’s 2018 bottom, where an ascending wedge pattern led to a breakout rather than a breakout.
Another factor supporting the uptrend is that Bitcoin is close to its 200-week simple moving average (200-week SMA, blue wave). Bitcoin bottomed around this level in 2018 and has since risen more than 1,975%.
As of 2026, the 200-week SMA has successfully curtailed any downside attempts for Bitcoin, increasing the possibility of a 2018-like bottom formation.
Related: Strategy’s STRC stock trading surge: How much Bitcoin can Saylor buy?
Some analysts expect Bitcoin to rise to $400,000 if Strategies continues to buy Bitcoin at the current rate.
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