Is Bitcoin Price at Risk of Crash as Treasury Companies Plan Fire Sale?

Bitcoin price was flat today, Nov. 26, as volume dropped ahead of the Thanksgiving weekend. BTC was stuck at $87,300, a range it has remained in the past two days. There is a risk that the coin may drop sharply as Bitcoin Treasury companies start selling their tokens.

Bitcoin Price at Risk as Treasury Companies Consider Selling Their Coins

One of the recent tailwinds that boosted the recent Bitcoin price surge could soon turn into a headwind. According to the Financial Times, many companies that have been accumulating Bitcoin this year could become sellers as the coin continues to underperform other assets like gold and the stock market.

The report noted that some companies have already started selling. For example, Sequans Communications has sold Bitcoin coins worth about $100 million. Other companies could start selling, a move that will lead to higher supply over time.

Data compiled by BitcoinTreasury shows that there are now over 100 companies with Bitcoin holdings in their balance sheets. The top 100 companies hold 1,058,564, while the rest hold 2,759 coins.

Most of these companies started accumulating Bitcoin, not because they believed in it, but because Strategy had successfully transformed from a fledgling software company into a multi-billion-dollar giant. 

As such, at some point, some of these firms may decide to sell now that the premium that has long existed has failed. Strategy’s market capitalization has dropped to $49 billion, much lower than its market capitalization of $56 billion.

Similarly, Metaplanet, the biggest Bitcoin treasury company in Japan, has a market capitalization of $2.6 billion, much lower than its Bitcoin holdings of $3 billion, meaning that it is trading at a substantial discount. 

Other companies like GD Culture, Semler Scientific, and MicroCloud Hologram have a NAV multiple of less than 1. One reason why some of these companies may decide to sell their coins is to repurchase their stocks, which have plunged recently.

Bitcoin price has other major headwinds, including the fact that spot Bitcoin ETF inflows have slowed in the past few months. All Bitcoin ETFs have shed $3.57 billion in assets this month, the worst performance since February, when they shed $3.56 billion.

BTC Price Technical Analysis Points to a Drop

The daily chart shows that the recent Bitcoin rally has lost momentum as it has dropped from $88,985 on Monday to the current $86,830. 

Bitcoin remains below the 50-day and 200-day moving averages, which made a death cross earlier this month. It has also dropped below the Supertrend indicator and the important resistance level at $107,325, the neckline of the double-top pattern at $124,300.

Therefore, the most likely Bitcoin price forecast is bearish, with the initial target being at $80,636, its lowest level this month. A drop below that level will invalidate the double-bottom pattern and point to more downside, potentially to the April low of $74,700.