Micro Strategy, in a recent 8-k filling, stated that it “purchased approximately 1,914 Bitcoins for approximately $94.2 million in cash, at an average price of approximately $49,229 per Bitcoin, inclusive of fees and expenses”. The company, which provides enterprise analytics software and is also famous for buying Bitcoin, noted that it held approximately 124,391 Bitcoins at an average purchase price of roughly $30,159 per bitcoin as of December 29, 2021. Micro Strategy uses cash raised via debt offerings and proceeds to buy Bitcoin. These tactics have led many investors to focus on the company’s Bitcoin holdings while few care about micro Strategy’s main business. Micro Strategy’s current market capitalization is about $5.5 billion, and the value of its Bitcoin holdings is about $5.9 billion. That shows its Bitcoin holdings exceed its market capitalization. This does not make the stock an immediate buy as Micro Strategy finished the third quarter with $2.15 billion of debt on the balance sheet.

Bitcoin managed to settle below the critical $50,000 level despite support from micro Strategy’s purchases. The key support level for Bitcoin is located at the recent lows near $45,500. If Bitcoin finds support below this level, it will gain additional downside momentum and may quickly get to the test of the following support levels at $44,100 and $42,600. On the upside, bitcoin needs to get back above the 20 EMA at $49,000 to have a chance to test the psychologically important support level at $50,000.