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Bitcoin neared $59,000 as Strategy's funding model faced its biggest stress test yet.
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Strategy sold 32 Bitcoin, challenging Michael Saylor's long-standing "never sell" Bitcoin narrative publicly.
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Crypto markets witnessed $1 billion liquidations, with long traders losing nearly $800 million alone.
Bitcoin price slipped near the $59,000 level, marking its second major drop this month. This drop has led the BTC to fall more than 50% below its October peak.
So, what’s the key reason why Bitcoin is dropping?
MSTR Stock Crash, But Bitcoin Under Pressure
One of the key factors behind Bitcoin’s decline is the sharp fall in MSTR Stock, which has dropped about 82% from its peak and recently hit a two-year low near $97, erasing more than $150 billion in market value.
Adding to the pressure, Strategy recently sold 32 BTC to help cover dividend payments, the company’s first known Bitcoin sale in years.
While it still holds 847,363 BTC, the move has raised concerns about its long-standing “never sell Bitcoin” strategy.
If MSTR continues to struggle, investors fear the company may need to rely on more share dilution, use additional cash reserves, or eventually sell more Bitcoin to meet financial obligations.
Liquidations and ETF Outflows Add More Selling Pressure
The decline is not being driven by Strategy alone. Nearly 176,900 traders were liquidated over the past 24 hours, with total liquidations reaching $1 billion.
Long traders accounted for almost $800 million, while short liquidations totaled about $220 million. The single largest liquidation was a $12.2 million BTCUSDT position on Binance.
Institutional demand has also weakened. Spot Bitcoin ETFs recorded more than $900 million in net outflows this week, showing that large investors are pulling money out rather than adding fresh capital.
Can Bitcoin Recover?
With market sentiment weakening and liquidity tightening, Bitcoin could face further downside before finding a strong bottom. Despite the recent decline, Bitcoin is still down about 50% from its all-time high, which is relatively modest compared to previous bear markets that saw drawdowns of 64% and 73%.
If those historical patterns repeat, Bitcoin may have more room to fall before the next major recovery begins.
Currently trading around $61,749, a move below $50,000 cannot be ruled out if selling pressure continues.
