Bitcoin (BTC) is showing new downside risks as a deepening standoff between corporate holder Bitcoin Strategy (MSTR) and global index provider MSCI collides with a weakening technical structure.
Key takeaways:
Bull Flag Setup Risks Sending BTC Price to $77.4K
As of Wednesday, Bitcoin has consolidated within a bear flag, a short-lived rally that typically forms after a sharp sell-off and often resolves with a trend continuation.
The structure suggests that sellers are regrouping rather than exiting positions, especially as BTC continues to trade below its 100-day and 200-day exponential moving averages.
A decisive break below the flag’s lower trendline would confirm the bearish continuation setup, opening the door for a measured move towards the $77,400 level.
Conversely, BTC could invalidate the bearish outlook if its price decisively breaks above the 50-4H exponential moving average (50-4H EMA; the red wave) around $88,655, as well as the flag’s upper trend line around $90,000.
Is strategy the goal of “successful work”?
Beyond the technicals, Bitcoin’s downside could be driven by growing uncertainty around Strategy, one of the largest corporate holders of BTC, as MSCI reviews whether to exclude companies whose digital assets make up the majority of their balance sheets.
MSCI’s pending decision, scheduled for January 15, 2026, could introduce a new layer of institutional risk just as Bitcoin’s price structure weakens, according to CryptoQuant author GugaOnChain.
Related: Supporters of the strategy and Bitcoin call for a “boycott” of JP Morgan
“Excluding MSTR from indices like the MSCI would trigger billions in automatic sales of its shares by passive funds,” he wrote in a Tuesday post, adding:
“Although the direct impact would fall on MSTR, the crypto market would interpret this as a sign of an institutional attack on the company’s Bitcoin accumulation strategy.”
JPMorgan also warned that if Strategy is excluded from the MSCI indices, passive funds that track those benchmark indices could be forced to make billions of dollars in stock sales.
Analyst Adrian accused JPMorgan of doing a “hit job of MSTR” to force investors to adopt its own Bitcoin-focused leveraged investment products. He wrote in an X publication:
“They are trying to kill $MSTR to engineer a migration to their products to expose themselves to Bitcoin leverage.”
Amid growing uncertainty related to MSCI, Strategy has taken steps to reassure markets about its financial resilience if the Bitcoin slowdown deepens.
In a Nov. 26 statement, the company said that even if Bitcoin fell to its average cost basis of around $74,000, it would still maintain 5.9x asset coverage relative to its convertible debt, a metric it refers to as its debt “BTC rating.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.
