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Bitcoin’s Dip Below $80K Could Be ‘Short-Lived’ as STRC Cycle Looms
TL;DR
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.
Key points
- Bitcoin hit an intraday low of $78,795
- U.S. spot Bitcoin ETFs posted $630 million in outflows
- Analysts expect the dip to be short-lived
- 85% chance Bitcoin will rise to $84,000
- STRC stock has driven mid-month buying rallies
Mentioned in this story
Bitrue Research Institute
In brief
- Bitcoin hit an intraday low of $78,795 as ETFs posted $630 million in outflows, the largest daily exit in three months.
- Strategy's STRC stock has driven mid-month buying rallies, ramping up from 4,467 BTC in January to 46,872 BTC in April.
- Myriad users remain optimistic, assigning an 85% chance that Bitcoin's next major move will take it to $84,000.
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.
The STRC mechanism
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.
Q&A
What caused Bitcoin to dip below $80,000 recently?
Bitcoin's recent dip below $80,000 was driven by $630 million in outflows from U.S. spot Bitcoin ETFs.
How low did Bitcoin drop during this recent decline?
Bitcoin hit an intraday low of $78,795 during this recent decline.
What is the likelihood of Bitcoin rising to $84,000 soon?
Analysts assign an 85% chance that Bitcoin's next major move will take it to $84,000.
What is the STRC cycle and its impact on Bitcoin?
The STRC cycle is a structural buying mechanism linked to Strategy's preferred stock, which has historically fueled mid-month buying rallies.
