Strategy is preparing for a downward cycle in Bitcoin

A new CryptoQuant report shows that Strategy is quietly preparing for a potential downward cycle in Bitcoin that could last for several months. This view contrasts with predictions in the market, which still believe the company will act like it did in 2021.

CryptoQuant pointed out in its latest weekly report that Michael Saylor's Bitcoin reserve company is undergoing a structural transformation: shifting from aggressive accumulation to balance sheet protection, including setting up separate dollar reserves, and acknowledging in its wording that it may hedge or even sell in a pressured environment in the future.

Nevertheless, Polymarket shows that the probability of the company selling Bitcoin in the first quarter of this year remains low, while expectations for routine small purchases remain strong.

Moreover, Polymarket traders still believe that Strategy (MSTR) has a high probability of making routine purchases, although the scale of purchases is shrinking.

The market assigns only about a 40% to 45% probability to “large purchases over 1000 BTC,” while the CryptoQuant report indicates that such “decorative replenishments” are becoming the norm. With monthly accumulation dropping over 90% compared to last year, traders expect future purchases to be more about maintaining brand image rather than truly affecting supply or regional liquidity.

The average purchase volume for Strategy has dropped from 15,133 BTC in 2024 to 5,330 BTC this year. Meanwhile, DAT inflow is at its weakest level since mid-June, indicating that the Bitcoin reserve company is no longer absorbing significant supply in the market.

Overall, the slowdown in reserve buying, weak DAT inflows, and MSTR's more defensive strategy all suggest that the supply landscape of the crypto market may change by 2026.

Whether Bitcoin can regain an upward trend will depend on whether new sources of demand can replace the previous cycle driven by corporate accumulation.