Strategy returns to Bitcoin buying with $65.5M purchase following short pause

• Strategy's Bitcoin holdings rose to 849,327 BTC after it bought 811 BTC for $65.5 million last week.
• Of the $164 million raised through share sales, the company directed $65.5 million towards Bitcoin purchases and added $98.5 million to its cash balance.
• Holding above support at $76,000, Bitcoin needs a close above $79,500 to reclaim the level it lost over the weekend.

With Bitcoin (BTC) still trading below $80,000, Strategy (MSTR) has returned to buying the leading cryptocurrency following a one-week break, adding 811 BTC for approximately $65.5 million.

Why is Strategy adding 811 BTC for $65 million during the market downturn?

An average purchase price of $80,846 per BTC took the company's total Bitcoin holdings to 849,327 BTC, acquired for roughly $64.08 billion, according to a Form 8-K filing submitted to the US Securities and Exchange Commission (SEC) on Monday.

Proceeds from sales of Class A common stock through Strategy's at-the-market (ATM) offering programme financed the acquisition.

Net proceeds from the sale of 1.1 million shares totalled $164 million. The company used $65.5 million for the Bitcoin acquisition and transferred the remaining $98.5 million to its USD Cash balance.

Over the same period, roughly $208.2 million from Strategy's USD Cash balance financed the repurchase of 2.09 million shares of its STRC preferred stock. A further $43.4 million from the separate USD Reserve was used to pay preferred stock dividends.

Is weak institutional demand keeping Bitcoin below $80K? QCP weighs in

Weak institutional demand and cautious market positioning continue to weigh on BTC as Strategy makes its latest acquisition.

QCP analysts, in their Monday market report, said the leading cryptocurrency had averted a steeper fall but remained under pressure following last week's loss of the $80,000 level.

Support emerged in the $76,000 to $76,600 range after Bitcoin touched $76,141 on Friday, its lowest point since 17 September.

While the $6.3 billion Binance hack accounted for much of the fall, QCP flagged persistent weakness in institutional investment flows.

Friday's $643.2 million in outflows from US spot Bitcoin exchange-traded funds (ETFs) brought October's net outflows to roughly $515 million.

Falling returns on the ETF basis trade were another concern highlighted by QCP. This strategy seeks to capture the price difference by buying spot Bitcoin and selling futures contracts. According to the report, its return is now approximately 4.8%, just 0.6 percentage points above US Treasury bill yields, making it less attractive to multi-strategy funds.

Caution was also evident in options positioning, with demand for downside protection staying high. QCP put the implied volatility priced around the US midterm elections at 47%.

Among the potential drivers of Bitcoin's next move, the report listed the US midterm elections, economic data releases from the Federal Reserve, the Bank of England's interest rate decision and October's Nonfarm Payrolls (NFP) figures, due on Friday.

Resistance lies between $79,500 and $80,500, while immediate support is around $76,000 to $76,600, according to QCP analysts.

QCP wrote: “A daily close back above $79,500 would recover the band lost on Thursday. A break of support would bring the 50-week average near $75,700 into view, with the 200-day near $73,100 below that,”

At the time of writing, a 1.3% decline over the past 24 hours has left BTC trading at $76,930.