MicroStrategy’s $1.4 Billion Reserves Brace for Bear Market! CryptoQuant: Bitcoin Could Drop to $55,000 Next Year

MicroStrategy Announces $1.44 Billion Reserve Fund to Cover Preferred Stock Dividends and Debt Interest Over the Next 12–24 Months, Sparking Widespread Bear Market Concerns

On-chain analytics firm CryptoQuant says this shows MicroStrategy is preparing for a potential Bitcoin bear market. If the bearish trend continues, Bitcoin prices could hover between $55,000 and $70,000 next year.

Defensive Shift: $1.44 Billion Reserve Strategy

(Source: SEC)

Bitcoin whale MicroStrategy has recently been mired in “coin selling FUD.” To ensure it can cover preferred stock dividends and corporate bond interest, the company has announced a $1.44 billion reserve fund. According to the official press release, the bulk of this massive reserve comes from last week’s common stock sale proceeds. The initial plan is to retain enough cash to pay all types of preferred stock dividends over the next 12 months. MicroStrategy will continue to replenish this reserve, ultimately aiming to cover more than 24 months of dividends.

CryptoQuant’s analysis says that establishing a two-year dollar buffer suggests MicroStrategy’s leadership expects Bitcoin prices could stagnate or decline for an extended period, and that future capital markets may be less receptive to additional equity issuances. This anticipatory move indicates MicroStrategy is no longer blindly optimistic and is preparing for the worst-case scenario.

In its latest Wednesday report, CryptoQuant noted: “MicroStrategy seems to realize the probability of a deep or prolonged Bitcoin correction can no longer be ignored.” This commentary marks a significant re-interpretation of MicroStrategy’s strategy—from the previous “always bullish, never sell” to a “cautious, defensive, and flexible” approach.

CryptoQuant believes that this “dual reserve model” of holding both USD and Bitcoin reduces the risk of forced Bitcoin selling during economic downturns, but also signals a fundamental shift from MicroStrategy’s “aggressive debt issuance and stock sales to go all-in on Bitcoin” strategy since 2020. This shift reflects both risk management maturity and possibly waning confidence in the market outlook.

Four Key Impacts of MicroStrategy’s Reserve Strategy

Reduced Forced Bitcoin Sale Risk: No need to sell Bitcoin to meet obligations within the two-year buffer period

Weakened Buying Power: Capital prioritized for reserves over Bitcoin purchases, dampening bull market momentum

Narrowing Stock Price Premium: Market may reassess MicroStrategy’s leverage value and growth prospects

Investor Confidence Impact: Conservative approach may be interpreted as management turning bearish

Analysts say this shift has significant implications for the Bitcoin market. On one hand, a major bull market buying force is weakening; on the other, MicroStrategy’s risk of panic-selling due to market fear is reduced, which may help stabilize the market long-term. This duality has led to divergent market interpretations—optimists see it as responsible risk management, while pessimists view it as a bearish signal.

Bitcoin Buying Power Plummets 93%, Confirming Strategic Shift

The data speaks for itself. MicroStrategy’s Bitcoin buying power slowed significantly in 2025, with monthly purchases dropping from 134,000 BTC in November 2024 to just 9,100 BTC in November 2025—a staggering 93% decline. This cliff-like drop in purchases is the clearest evidence of a strategic pivot.

November 2024’s 134,000 BTC monthly purchase was one of the most frenzied periods in MicroStrategy’s history. At the time, Bitcoin had just broken through $100,000, market sentiment was extremely bullish, and MicroStrategy aggressively raised funds to buy in at full throttle. Such an aggressive strategy was highly effective during the bull market, rapidly boosting MicroStrategy’s stock price and per-share BPS, creating a positive feedback loop.

However, by November 2025, purchases dropped to just 9,100 BTC per month—a 93% decrease. This slowdown is not due to a lack of funds, but a strategic choice. MicroStrategy is now retaining more capital in USD reserves rather than converting it all to Bitcoin. The logic behind this choice: when market uncertainty increases, liquidity becomes more important than position size.

CryptoQuant points out that MicroStrategy’s strategy has shifted from “aggressive accumulation” to “liquidity first,” coinciding with the largest Bitcoin correction of 2025. This timing may not be a coincidence, but rather management’s judgment of market cycles. As Bitcoin fell from its $126,000 peak to a low of $80,000, MicroStrategy chose not to continue aggressive accumulation but to preserve cash for potential further declines.

This slowdown in buying power has a significant impact on the Bitcoin market. In recent years, MicroStrategy has been one of Bitcoin’s biggest and most consistent buyers, providing strong demand support. When this demand source weakens, Bitcoin loses a crucial buying pillar. From a supply-demand perspective, a 93% drop in MicroStrategy’s buying power equates to a reduction of about 120,000 BTC in monthly stable demand, putting substantial downward pressure on price.

The report adds that MicroStrategy’s attitude toward its Bitcoin holdings is no longer “never touch under any circumstances.” Management now believes that, to protect Bitcoin assets, a more flexible approach is crucial in extreme situations—including increasing cash buffers, using hedging tools, and selectively realizing profits during downturns. This shift signals a move from “Bitcoin maximalism” to “pragmatic risk management.”

CryptoQuant Bear Market Forecast: $55,000 Bearish Scenario

CryptoQuant’s Head of Research, Julio Moreno, has shocked the market with his forecast. He predicts that if the bearish trend continues, Bitcoin could range between $55,000 and $70,000 next year. This range suggests a 40% to 25% decline from the current ~$92,000 level—a highly pessimistic outlook.

This forecast is not unfounded but based on a comprehensive analysis of multiple technical and on-chain indicators. CryptoQuant notes that nearly all major on-chain and technical indicators are flashing red. The “Bull Score Index” recently fell to zero (most bearish level) for the first time since January 2022.

The Bull Score Index, developed by CryptoQuant, is a composite indicator incorporating on-chain data, technical signals, and market sentiment. The index ranges from 0 (extremely bearish) to 100 (extremely bullish). The last time it hit zero was January 2022, when Bitcoin was around $47,000, before plunging to a $15,000 low in November of that year—a drop of over 68%.

If history repeats, the current Bull Score Index falling to zero could signal a similar sharp correction. A 40% drop from $92,000 exactly matches Moreno’s $55,000 lower target—giving the bearish forecast empirical support.

Julio Moreno believes MicroStrategy’s new USD reserve move indicates the company is indeed more likely to sell Bitcoin, but he emphasizes this remains a last resort; in practice, the company will likely prioritize derivatives hedging. Derivatives hedging refers to using futures, options, and similar tools to offset downside risk without actually selling holdings. Should MicroStrategy start using derivatives for hedging, it would mark a further evolution of its strategy.

Three Main Supports for CryptoQuant’s Bear Market Forecast

Bull Score Index at Zero: Composite indicator at its lowest since January 2022

MicroStrategy Buying Down 93%: Major buyer’s demand has shrunk dramatically

Historical Cycle Similarity: Current market structure closely mirrors pre-crash conditions in early 2022

The $55,000–$70,000 forecast range gives investors of different risk appetites a reference point. Conservative investors may wait for prices near $55,000 before buying the dip, while aggressive investors may start building positions at $70,000. In any case, this forecast provides a clear bear market target for the market.

However, the forecast could be wrong. If the Fed accelerates rate cuts, the US establishes a strategic Bitcoin reserve, or other major bullish events occur, Bitcoin may avoid a deep correction. CryptoQuant’s forecast is based on continuation of current trends, but the market environment can change at any time. Investors should treat this as a risk scenario, not a guaranteed future.

From MicroStrategy’s perspective, if Bitcoin really falls to $55,000, its 650,000 BTC holdings would shrink in value from the current $60 billion to $35.7 billion—a loss of over $24 billion. In this scenario, mNAV could fall below 1.0, triggering the “last resort” condition described by CEO Phong Le. That’s why MicroStrategy is proactively building a $1.44 billion reserve—to avoid being forced to sell Bitcoin even in the worst-case scenario.

From All-In to Defense: The End of the MicroStrategy Era?

CryptoQuant’s report raises a profound question: Does MicroStrategy’s fundamental shift away from “aggressively issuing debt and stock to go all-in on Bitcoin” since 2020 mark the end of an era? For the past five years, MicroStrategy’s aggressive strategy has provided vital demand support for Bitcoin’s bull market, with each major purchase triggering market follow-through.

Now, as MicroStrategy turns defensive, the market loses this crucial psychological anchor. Investors may wonder: If even the most committed Bitcoin believers are switching to defense, does it mean the bull market is truly over? This psychological impact could be more damaging than the actual reduction in buying power, as it shakes the foundation of market confidence.

On the other hand, MicroStrategy’s transition may also be seen as a sign of maturity and rationality. Blind aggression works in a bull market, but can be fatal during cycle transitions. MicroStrategy’s decision to slow down at the top and retain cash for uncertainty is responsible corporate management. In the long run, this strategy may allow MicroStrategy to survive the bear market and rise again in the next bull run.