Bitcoin hits resistance at $66,000: Strategy issues slow down the rally
The Bitcoin market is stuck in a consolidation phase, and a clear breakout above the $66,000 mark is needed to resume the upward movement. However, the key hindering factor is not so much the volatility of the first cryptocurrency itself, but rather the issues with Strategy's preferred shares, STRC. This creates a unique situation where the stock market exerts direct pressure on the cryptocurrency market.
Analysts note that as long as the BTC price stays below $66,000, it is premature to talk about a full-fledged rally. Interestingly, in the event of a potential decline, a quick recovery of lost positions could become a strong bullish signal. But for now, the main focus is on Strategy's financing mechanism through STRC.
Strategy's Model Under Pressure
Intermediate zones between key levels remain less than ideal for trading. The main goal for the current week is to hold the 200-week moving average, which in past cycles has served as a reliable bottom. However, a much more alarming signal comes from STRC shares.
The drop of these preferred shares below their par value of $100 is not just a story about "overdue assets." It is a direct blow to Strategy's Bitcoin accumulation machine. Previously, the scheme worked flawlessly: the company issued STRC at around $100, paid high dividends, directed funds toward BTC purchases, and the cryptocurrency's growth supported the entire structure.
Now, with STRC trading around $88–89, the effective yield for buyers approaches 13%, and the market demands an increasingly higher return for lending to Strategy. On June 22, the stock hit a record low of $82.53 — nearly 17% below par. This directly weakens the engine of "issued preferred shares — bought BTC."
Chain of Consequences
The consequences form a chain: the cost of capital for Strategy rises, new issuances become unattractive, and dividends must be paid at the full stated value of $100. As a result, Bitcoin purchases may slow down. The company has fewer straightforward ways to increase its BTC holdings without using common stock, debt, cash reserves, or even small cryptocurrency sales.
These concerns have already been confirmed: the company has paused new share issuances through its market program and, for the first time, sold some BTC to pay dividends. This is not yet a story of Strategy's complete collapse, but the drop of STRC below par exposes a weak point in the model. The Bitcoin treasury flywheel works perfectly when capital is cheap, but becomes much more fragile when the market starts demanding over 13% for financing.
My view: The current situation is a classic example of how traditional financial instruments impact the cryptocurrency market. A breakout above $66,000 is possible, but only if Strategy resolves its issues with STRC or finds alternative sources of financing. Until that happens, the market will remain in a state of limbo, and any upward movement will be viewed with caution.