Bitcoin is trading within a bear flag pattern that could lead to a decline toward $50,000. However, ongoing purchases by Michael Saylor’s company, Strategy, have consistently absorbed new supply, potentially offsetting this technical bearish signal. Analysts note the pattern resembles Bitcoin’s 2018 bottom formation, where a similar bearish setup failed and triggered a major reversal.
Bitcoin’s price action shows a bear flag pattern projecting a potential breakdown toward the sub-$50,000 area. This normally acts as a bearish continuation pattern due to insufficient demand to overcome a downtrend. In Bitcoin’s case, however, Strategy has been taking supply off the market faster than miners can replace it.
Since March 2, Strategy’s Bitcoin holdings have risen by over 46,000 BTC. Miners produced only about 16,200 BTC during the same period, meaning Strategy absorbed nearly three times the new supply. Much of this demand came through STRC, Strategy’s variable-rate preferred stock.
When STRC traded near or above its $100 par value, Strategy issued shares to fund Bitcoin purchases. Last week, Strategy raised $102.6 million through STRC sales to fund a Bitcoin purchase worth over $330 million. BTC’s price jumped over 6.65% following that purchase.
During March 9–13, STRC sales raised about $776 million, enough to buy over 11,000 BTC. Bitcoin rose more than 7% even as the S&P 500 fell 1.6%. However, when STRC slipped below par in mid-March, issuance slowed.
Earlier below-par episodes coincided with 25%–40% Bitcoin pullbacks. Bitcoin’s long-term holders and whales drove much of that selling. The bear flag would begin to fail if price breaks above the upper trendline near the mid-$70,000 area.
That breakout would invalidate the immediate bearish setup and shift focus to a bullish measured-move target near $108,000-$110,000. A similar pattern failure occurred near Bitcoin’s 2018 bottom, when a rising wedge pattern led to a breakout instead of a breakdown.
Another factor is Bitcoin’s position near its 200-week simple moving average. In 2018, Bitcoin bottomed out near this level and rose by over 1,975% afterward. As of 2026, the 200-week SMA has capped Bitcoin’s downside attempts successfully. Some analysts anticipate BTC to rise to $400,000 if Strategy continues buying at its current rate.
