Strategy (MSTR) remains an important proxy for Bitcoin’s price behavior in the current market.
That link stems from Strategy’s Digital Asset Treasury, which held more than 41,000 Bitcoin as part of a long-term accumulation plan.
Both assets traded lower as sentiment remained bearish. The MSTR fell about 65% from the peak of $543, while BTC fell about 37% from $126,000.
Their correlation remained high at 0.95, reinforcing how closely MSTR continues to follow Bitcoin’s direction.
Fractal patterns point to more disadvantages
A bearish fractal formation on the MSTR indicated additional downside risk for both assets.
The structure reflected MSTR’s 2021-2023 cycle, when the stock experienced a prolonged decline characterized by lower highs and lower lows. That phase lasted 689 days and saw a trading volume of approximately $3.34 billion.
Source: Alpharactal
The current pattern started in late 2024 and could last roughly 685 days, with expected volume of nearly $5.09 billion, according to Joao Wedson.
Selling pressure appeared to increase after Strategy executives sold shares around the November 2024 peak. Wedson estimated that the MSTR could return to $70-$80 from around $145 at the time of analysis.
“I estimate a fair price around $70-$80 per share, as each bear market cycle tends to produce smaller declines,” Wedson said.
A move to $70 would represent a decline of around 50% from current levels. Based on historical correlation, that scenario could attract Bitcoin [BTC] towards the $58,000 region, with deeper projections remaining less likely.
Bitcoin’s recovery remains uncertain
Bitcoin’s broader recovery remained uncertain when viewed via holder-based Realized Price signals.
Source: Alpharactal
Historically, bull markets began when the price realized by the short-term holder exceeded the price realized by the long-term holder. In contrast, bear markets ended once the Long-Term Holder Realized Price rose above the short-term level.
The charts showed a persistent divergence between short-term and long-term holder prices, characterized by the lack of confirmed green reversal signals. Until that spread narrowed, downside risk remained high.
That structure kept traders focused on whether long-term holders would absorb supply at lower levels.
Institutional investors are stepping back
Institutional behavior showed early signs of stabilization.
Despite Bitcoin revisiting April 2025 price levels, US Spot Bitcoin ETFs recorded net inflows of $561.9 million on February 2, marking the first positive daily flow since mid-January. SoSoValue.
This shift suggested that the two-week institutional selling streak may have stalled.
Still, sustained inflows would be needed to offset the broader bearish structure.
Without confirmation from the statistics of the chain owners, any recovery could remain corrective rather than trend-setting.
Final thoughts
- Strategy [MSTR] reflected the 2021-2023 fractal, indicating downside risk. An expected move towards $70-$80 could put pressure on Bitcoin towards the $58,000 region.
- The realized price for short-term holders remains below that of long-term holders, although the $561.9 million inflows into ETFs indicate early institutional support.