Bitcoin (BTC) is trading within a bear flag pattern that projects a breakdown towards the sub-$50,000 zone, approximately 30% below current levels. However, Michael Saylor’s strategy could spoil the Bears’ plans.
Key takeaways:
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Bitcoin has avoided a bear flag breakdown for weeks as Strategy continues to buy BTC.
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The pattern now resembles Bitcoin’s 2018 bottom, when a downtrend failed and triggered a reversal.
Can Strategy’s BTC Buys Compensate for Weak Technical Data?
Normally, a bear flag remains a downtrend because there is not enough demand to overcome the broader downtrend.
In the case of Bitcoin, however, Strategy removed supply from the market faster than miners can replace it.
Since March 2, Strategy’s Bitcoin holdings have increased by 46,233 BTC, while miners have only produced around 16,200 BTC over the same period, meaning they have absorbed nearly three times the new supply.
Much of this demand comes from 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, The strategy raised $102.6 million via STRC sales to help fund a Bitcoin purchase worth over $330 million. Since then, the price of BTC has jumped more than 6.65%.
From March 9 to 13, STRC sales raised approximately $776 millionenough to buy more than 11,000 BTC, while Bitcoin rose more than 7% even as the S&P 500 fell 1.6%. During the same period, the price of BTC increased by more than 10.5%.
But when STRC fell below par in mid-March, issuance slowed. Previous below-average episodes had coincided with 25-40% BTC withdrawals, including a drop of almost 40% over three weeks after a break in January.
Bitcoin long-term holders and whales drove much of the selling.
Bear Flag Failure Could Set Stage for Rally to $110,000
Bitcoin remains in a bear flag after a sharp decline, but the trend would start to fail if the price breaks above the upper trendline near the mid-$70,000 zone.
This breakout would invalidate the immediate bearish continuation pattern and shift the focus towards the measured upside move target near $108,000 to $110,000.
A similar pattern failure occurred near Bitcoin’s 2018 bottom, when an ascending wedge pattern led to a breakout instead of a breakdown.
Another factor supporting the optimistic scenario is Bitcoin’s position near its 200-week simple moving average (200-week SMA, the blue wave). In 2018, Bitcoin bottomed near this level and subsequently rose over 1,975%.
Since 2026, the 200-week SMA has managed to cap Bitcoin’s downward attempts, increasing the chances of a 2018-like bottom formation.
Related: Strategy STRC Stock Trading Rise: How Much Bitcoin Can Saylor Buy?
Some analysts anticipate BTC will rise to $400,000 if Strategy continues to buy BTC at its current rate.
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