The Bitcoin market has always been known to move in cycles, with extended periods of positive price action often followed by moments of downside movements. However, the BTC cycle theory has been proclaimed “dead” and stale by various segments of the crypto community over the past few weeks.
In the various analyses of the cyclical theory, analysts often attributed the recent shift in the market dynamics to the new era of institutional involvement through exchange-traded funds (ETFs). The latest evaluation of the new market structure suggests the new institutional players could also play a role in the arrival of the next bear market.
Why New Corporate Entrants Could Usher In The Next Bear Market
In a new post on the social media platform X, crypto analyst Burak Tamac explained how the new corporate buyers of Bitcoin could be behind the next Bitcoin bear market. The crypto pundit made this claim in response to a revelation by finance expert Lyn Alden about business intelligence firm Strategy’s current position in the BTC market.
Alden shared a key takeaway from an interview with Strategy’s Chairman Michael Saylor, who revealed that the firm can still meet obligations (like preferred dividends) after even up to an 80% correction for the price of Bitcoin. The finance expert mentioned that Saylor acknowledged that only a deeper correction could pose potential challenges.
Saylor said on the livestream:
I think our structure is smooth and we wouldn’t miss a single dividend payment on an 80% drawdown. On a 90-95% drawdown, in theory you might suspend something for a little bit of time but you’d eventually get back current on it.
Tamac revealed that Strategy’s market positions are somewhat safe so long as the price of Bitcoin never returns to the $22,000 level. According to the crypto analyst, it’s a different story for other companies, as they are relatively newer to the market and their acquisition prices are higher than Strategy’s.
Unlike Saylor’s Strategy, which made its first purchase before the 2020 bull run and survived the 2022 bear season, Tamac revealed that the newer companies acquired their first BTC at prices closer to the top. As a result, Tamac believes that the fresh institutional entities are more likely to usher in the Bitcoin bear market due to their increased propensity to capitulate should the premier cryptocurrency’s price witness a sharp decline.
Bitcoin Price At A Glance
As of this writing, the price of BTC sits around $112,860, reflecting no significant movement in the past day. According to data from CoinGecko, the market leader is down by more than 4% in the past seven days.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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