Key takeaways:
- Michael Saylor has explained that MicroStrategy’s Bitcoin strategy factors in crypto market volatility.
- He also added that MicroStrategy’s balance sheet is structured so that the company can continue to hold BTC through adversity.
- Mr. Saylor’s comments come in the wake of Bitcoin slipping below the magic $21k price level that has been highlighted as an area for MicroStrategy to receive a margin call on its $205 million loan.
Michael Saylor has stated via Twitter that MicroStrategy’s Bitcoin strategy was designed to factor in crypto volatility such as the one being experienced in the markets right now. Mr. Saylor also added that MicroStrategy’s balance sheet is structured in such a way that it allows the company to keep holding Bitcoin through adversity.
Mr. Saylor’s tweet sharing insights into MicroStrategy’s Bitcoin strategy can be found below.
When @MicroStrategy adopted a #Bitcoin Strategy, it anticipated volatility and structured its balance sheet so that it could continue to #HODL through adversity. https://t.co/rPSUVPHUVw
— Michael Saylor⚡️ (@saylor) June 14, 2022
Bitcoin Drops Below the Magic $21k Value Needed to Trigger a Margin Call on MicroStrategy’s $205 million.
Mr. Saylor’s input on MicroStrategy’s Bitcoin strategy comes a few hours after BTC dropped below the magic $21k price level that was mentioned by the company’s CFO, as the value needed to trigger a margin call on the company’s $205 million loan.
However, the CFO had also clarified that the company was prepared to add more Bitcoin as collateral should the price of BTC drop below the magic number.
To note is that Mr. Saylor’s tweet above includes another Tweet whereby he explained that the company was ready to pledge 115,109 BTC as collateral to the $205 million loan. This amount of BTC would be sufficient to keep a margin call at bay till a Bitcoin value of $3,562, which would translate to the $410 million collateral needed to maintain the loan.
Mr. Saylor had, however, stated that the company was willing to post some other type of collateral should Bitcoin drop below the $3,562.
What the Bitcoin Chart Says About BTC’s Future.
A quick look at the daily chart below reveals that Bitcoin has retested the crucial 200-week moving average (blue) that has held during the 2018 bear market and the Coronavirus crash of March 2020. Also, from the chart, it can be observed that Bitcoin’s most recent sell-off has been considered extreme. The daily MFI and RSI further confirm this by dipping significantly into oversold territory.
However, Bitcoin might not be done losing value as the daily MACD hints of further selling. Consequently, Bitcoin could retest the 2017 high of $20k or the 2019 peak value of around $14k in the following days or weeks.
