Strategy buys $65.5M of Bitcoin, ending brief pause in purchases

• An 811 BTC purchase costing $65.5 million last week lifted Strategy's total holdings to 849,327 BTC.
• 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.
• Above $76,000 support, Bitcoin needs a close beyond $79,500 to reclaim the level it lost over the weekend.

An acquisition of 811 BTC for approximately $65.5 million marks Strategy's (MSTR) return to Bitcoin (BTC) accumulation following a one-week pause, while the leading cryptocurrency remains below $80,000.

Strategy buys 811 BTC for $65 million as market declines

With an average purchase price of $80,846 per BTC, the latest acquisition takes the company's total Bitcoin holdings to 849,327 BTC, bought for roughly $64.08 billion, as detailed in a Form 8-K filing submitted to the US Securities and Exchange Commission (SEC) on Monday.

Proceeds from Class A common stock sales under 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 to buy Bitcoin and added the remaining $98.5 million to its USD Cash balance.

During the same period, Strategy bought back 2.09 million shares of its STRC preferred stock for roughly $208.2 million. Its USD Cash balance financed those repurchases, while a further $43.4 million from the separate USD Reserve covered preferred stock dividends.

Bitcoin remains below $80K as QCP highlights subdued institutional demand

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

In their Monday market report, QCP analysts observed that, despite avoiding a sharper fall, the leading cryptocurrency remained under pressure after dropping below $80,000 last week.

After touching $76,141 on Friday, its lowest point since 17 September, Bitcoin found support in the $76,000 to $76,600 range.

While the $6.3 billion Binance hack accounted for much of the decline, QCP drew attention to persistent weakness in institutional investment flows.

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

Falling returns on the ETF basis trade were another concern highlighted by QCP. The trade seeks to capture the price difference by purchasing spot Bitcoin and selling futures contracts. According to the report, it now yields approximately 4.8%, just 0.6 percentage points more than US Treasury bills, making it less attractive to multi-strategy funds.

Caution was also evident in options positioning. Demand for downside protection remained high, QCP noted, with implied volatility around the US midterm elections priced 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) data, due on Friday.

For Bitcoin, QCP analysts placed immediate support at around $76,000 to $76,600 and resistance in the $79,500 to $80,500 range.

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, BTC trades at $76,930, a decline of 1.3% over the past 24 hours.