Bitcoin surges back! MicroStrategy CEO bullish against the trend, is smart money preparing to enter?

Bitcoin has risen 1.5% in the past 24 hours to $89,000, but remains 29% below its all-time high. The Fear & Greed Index has been in “Extreme Fear” for 13 consecutive days. MicroStrategy CEO Phong Le states that the fundamentals are “better than ever,” citing the U.S. strategic reserves and TradFi banks entering the market. MicroStrategy’s mNAV has fallen to 0.93, below its holdings of 671,268 BTC, implying a smart money entry point.

Why is MicroStrategy CEO bullish against the market trend? Three fundamental supports

Phong Le’s optimism is not blind but based on three structural changes. First is unprecedented support from the U.S. government. Since March this year, when the U.S. President signed an executive order establishing a strategic Bitcoin reserve, Bitcoin has upgraded from a fringe asset to a national strategic asset. This policy endorsement provides unprecedented legitimacy for Bitcoin, significantly reducing regulatory concerns among TradFi institutions.

Second, TradFi banks are competing to enter the digital asset market. Le points out that banks in the U.S. and UAE are racing to follow, and institutional adoption is just beginning. When giants like JPMorgan and Wells Fargo start offering Bitcoin custody and trading services to clients, it will inject hundreds of billions of dollars in new demand. This demand is not speculative but long-term allocation, which is the core logic behind Le’s emphasis on “fundamentals being better than ever.”

Third, the valuation dislocation of MicroStrategy itself. Its mNAV just dropped to 0.93, meaning the market values the company below its holdings of 671,268 BTC. Such a valuation discount is extremely rare historically and usually occurs during periods of extreme market panic. Le hints that this may indicate that institutional “smart money” considers now a good time to invest. When the market prices below net asset value, it’s often the best entry point for value investors.

Le advises investors to maintain a “rational” attitude towards short-term price fluctuations. This advice is based on confidence in Bitcoin’s long-term value proposition: scarcity (max 21 million), decentralization, and increasing institutional adoption. Short-term volatility is noise; the long-term trend is the signal. For MicroStrategy, their continuous accumulation of Bitcoin during market panic has enabled a spectacular transformation from a software company to a Bitcoin holding company.

13 days of Extreme Fear: a historical bottom signal

The Bitcoin Fear & Greed Index is currently at 23, in “Extreme Fear” for 13 days straight. This indicator combines volatility, market momentum, social media sentiment, market dominance, and Google search trends. When the index drops below 25, it’s defined as “Extreme Fear,” often signaling overly pessimistic market sentiment.

Historical data shows that prolonged panic often precedes counter-trend moves. Market observers note that major cycle bottoms tend to occur when sentiment is most pessimistic. At the end of 2018, when Bitcoin fell to $3,200, the Fear Index was also in extreme panic, followed by a two-year bull run. Similarly, during the March 2020 COVID-19 panic sell-off, extreme fear was followed by an epic rebound.

Does the current 13-day streak of extreme panic signal a bottom? Contrarian traders are closely watching whether this “emotional exhaustion” will support a breakout in Q1 2026. Historical experience suggests that when retail sentiment hits extreme pessimism, it’s often when institutional investors quietly accumulate. This divergence between sentiment and price is exactly the “panic-driven mispricing” opportunity value investors seek.

However, extreme fear does not guarantee an immediate rebound. During the 2015 bear market, the Fear Index remained in extreme panic for months, and prices continued to decline. Relying solely on sentiment indicators for trading carries risks; it must be validated with other technical and fundamental signals.

BCMI falling below 0.4 indicates unremoved bear market risk

Despite strong fundamentals, on-chain technical indicators warrant caution. The Bitcoin Composite Market Index (BCMI), which combines price momentum and on-chain activity, has fallen below the equilibrium zone of 0.5. Analyst Woo Minkyu states that BCMI is currently below 0.4. In previous cycles (2019 and 2023), lasting bottoms only formed when BCMI dropped between 0.25 and 0.35.

BCMI is a multi-dimensional on-chain indicator integrating price momentum, transaction volume, miner behavior, and market liquidity. When BCMI exceeds 0.5, it indicates a healthy upward trend; below 0.5, bearish forces dominate. The recent drop below 0.4 suggests increasing bearish momentum, corroborating retail panic sentiment.

Technical analysis shows Bitcoin’s current trading range is between $87,700 and $94,000. To invalidate the bear market thesis, the daily close must be above $94,000. This resistance is a key technical and psychological level. Breaking through it would target the $100,000 psychological mark.

Bitcoin 2026 Dual Scenario Pathways

(Source: Trading View)

Bearish Scenario: If BCMI continues to decline toward 0.30, Bitcoin may experience a final “capitulation decline” before Q1 2026, dropping to support zones of $75,000–$80,000.

Bullish Scenario: If the U.S. government officially implements the strategic Bitcoin reserve plan, supply shocks could push Bitcoin back to its $125,100 all-time high by mid-2026.

Neutral Scenario: Bitcoin remains range-bound between $87,700 and $94,000, waiting for leveraged positions to be cleared.

In the medium to long term, Bitcoin may continue sideways consolidation as it attempts to shake off over-leverage. Although painful, this process is crucial for establishing a healthy upward foundation. Excess leverage makes the market fragile; any negative news could trigger chain liquidations. Only when leverage is reduced to reasonable levels can the market withstand larger capital inflows without violent swings.

MicroStrategy’s 670,000 BTC leverage game

MicroStrategy holds 671,268 BTC, making it the largest corporate Bitcoin holder globally. However, this aggressive allocation strategy also sparks controversy. MicroStrategy’s business model essentially uses TradFi debt and equity financing to leverage its Bitcoin exposure. This strategy can amplify returns in bull markets but also faces significant valuation pressures in bear markets.

What does the mNAV of 0.93 imply? It indicates the market values MicroStrategy at only 93% of its Bitcoin holdings, a 7% discount. This discount may reflect market concerns over MicroStrategy’s debt structure or short-term liquidity issues. For value investors, this discount offers an opportunity to buy Bitcoin exposure below net asset value.