Bitcoin dipped below $80,000, hitting a low of $78,795 amid $630 million in ETF outflows. Analysts predict the decline will be short-lived, with an 85% chance of a rise to $84,000.
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Bitcoin dipped below $80,000 this week, but one analyst expects the decline to be brief—pointing to a structural buying mechanism tied to Strategy's preferred stock that has fueled mid-month rallies for three consecutive months.
The leading crypto is trading at around $79,680, down 0.5% over the past 24 hours according to CoinGecko data, after hitting an intraday low of $78,795. The drop comes as U.S. spot Bitcoin ETFs posted $630.4 million in net outflows on May 13, the largest daily exit in three months.
“This dip will be short-lived,” Andri Fauzan Adziima, research lead at Bitrue Research Institute, told Decrypt. “We've seen a classic liquidity sweep of recent lows around $78,000–$79,000, followed by a solid defense of the monthly 50MA and a quick reclaim above $80,000. On-chain flows show large wallets continuing to accumulate aggressively.”
However, there’s another factor working behind the scenes—Bitcoin treasury firm Strategy’s preferred shares STRC, pronounced Stretch.
Strategy's STRC has fueled mid-month rallies for three consecutive months, according to a Tuesday report from K33 Research. The Bitcoin treasury company has ramped up its Bitcoin purchases through this instrument from 4,467 BTC in January to 22,131 BTC in March and nearly 46,872 BTC in April.
This Friday marks another STRC ex-dividend date, which could spark another mid-month rally soon, according to Vetle Lund, the firm’s head of research.
The mechanism works like this: STRC pays dividends on the last day of each month, with ownership determined by the ex-dividend date on the 15th. Investors pile in ahead of the dividend, pushing the stock toward its $100 par value, which allows Strategy to issue additional shares and use the proceeds to buy Bitcoin.
Bitcoin's recent dip below $80,000 was driven by $630 million in outflows from U.S. spot Bitcoin ETFs.
Bitcoin hit an intraday low of $78,795 during this recent decline.
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The STRC cycle is a structural buying mechanism linked to Strategy's preferred stock, which has historically fueled mid-month buying rallies.
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However, Adziima cautioned that the May cycle already looks different.
“STRC recovered to par much more slowly, and the actual conversion into Bitcoin buying has been minimal so far—only around 1 BTC reported through the instrument,” he said. “Demand for the preferred seems to be plateauing after the big earlier runs. The mechanism is still there, but it lacks the scale and urgency we saw in March and April.”
Bitcoin has not kept pace with the AI-driven equity rally, according to Jeff Ko, chief analyst at CoinEx. “The old ‘AI rally lifts crypto’ thesis is broken,” Ko told Decrypt. “If anything, the AI rally is now absorbing the speculative capital that used to flow into crypto.”
Still, Ko sees constructive signs, with Bitcoin ETFs drawing in over $4 billion in inflows since March, and stablecoins absorbing more than $7 billion since February. “Crypto will gradually leave the bearish zone from here if ETF and stablecoin flows hold up,” he said.
The CLARITY Act markup hearing is scheduled for 10:30 am EDT Thursday. If it progresses well, it could serve as a tailwind for the crypto market.
On prediction market Myriad, owned by Decrypt's parent company Dastan, users see an 85% chance that Bitcoin's next major move takes it to $84,000 rather than dumping to $55,000.
For now, the STRC ex-dividend date on Friday will test whether the pattern holds for the fourth month, or whether the mechanism has run its course.