Institutional Cash Accumulation Sends a Signal: Bitcoin Cycle Adjustment in Progress

On-chain data reveals subtle changes. According to the latest market observations, large institutions that have been continuously accumulating Bitcoin have recently shifted their strategy, reallocating funds toward defensive positions. Strategy (MSTR), as a barometer for institutional crypto asset allocation, paused buying activities last week, with cash reserves rising to $2.2 billion. This move reflects market participants’ cautious assessment of liquidity prospects.

The cost of market sentiment has been reflected in stock prices. Since the beginning of the year, MSTR’s stock price has fallen over 43% from its high, which not only indicates adjustments in crypto assets but also mirrors the re-pricing of risk assets in traditional financial markets. Bitcoin itself has repeatedly tested support within high volatility bandwidth, currently oscillating around $91.64K, with a 24-hour increase of nearly 1%, but lacking the momentum for a breakout.

Why are institutions choosing “cash is king”? The answer points to two aspects: first, the liquidity tug-of-war caused by derivatives contract expirations; second, the market entering a deleveraging cycle, requiring patience for new consensus formation. In the short term, Bitcoin is unlikely to escape high volatility patterns, with the key variable depending on when institutional funds re-enter the market.

How should retail investors respond? During the cycle adjustment phase, blindly increasing positions is no longer a wise choice. A more pragmatic approach is to control individual positions, stagger deployments, and utilize stablecoins like USDT to maintain flexibility. Allocating to diversified assets such as US and Hong Kong stock futures can effectively disperse cyclical risks and protect capital in uncertain environments. At this stage, risk management takes precedence over pursuit of returns.