Bitcoin flash crash 7% falls below $87,000, does MicroStrategy's "green dot" signal hide a secret?

On December 1st, Bitcoin experienced a sudden flash crash, with the price rapidly falling below the $87,000 mark, resulting in a single-day big dump of over 7%, wiping out all gains from the previous week and triggering $400 million in leveraged positions getting liquidated. Meanwhile, MicroStrategy Executive Chairman Michael Saylor posted a mysterious “green dot” tweet, suggesting the possibility of initiating a new round of Bitcoin accumulation, while the company's CEO acknowledged for the first time that they might sell Bitcoin holdings in extreme circumstances. The market is caught in a conflicting dilemma between technical breakdowns and institutional signals, with investors closely following the defense of the key support level at $80,000.

Market Flash Crash and Chain Liquidation

Bitcoin experienced a sudden and drastic sell-off on the first trading day of December, with its price quickly plummeting from around $93,000 to a low of $86,900, resulting in a single-day fall of over 7%, completely reversing all gains from the previous week. This flash crash occurred during a weekend when liquidity was relatively thin, amplifying the impact of price fluctuations. The total market value of cryptocurrencies worldwide subsequently fell by 4% to $3.04 trillion, and market sentiment noticeably shifted to a cautious stance.

The chain reaction of leveraged trading is an important driving force behind this big dump. According to CoinGlass data monitoring, the total liquidation amount in the entire market reached as high as 400 million USD within just one hour, with long positions being the dominant factor. Trading volume surged to 110 billion USD, indicating that investors were forced to adjust their positions during the sharp price drop. The market share of Bitcoin remains at a high level of 57.1%, while Ethereum's share is 11.3%, indicating that funds have not massively shifted to other crypto assets, but rather temporarily exited the market to observe.

Analyst Kobeissi Letter pointed out that this big dump was primarily due to a combination of insufficient liquidity over the weekend and record high leverage, rather than a deterioration in fundamentals. He emphasized that “this crypto bear market is still structural, and we do not believe this is a fundamental decline,” and added that Bitcoin fell $4,000 in just a few minutes without any major bearish news, which was further amplified by the massive liquidation of leveraged positions triggered by the domino effect that followed.

Key Market Data Overview

• Bitcoin lowest price: 86900 USD (single day fall of 7%)
• One Hour Get Liquidated Amount: 400 million USD
• Total market capitalization of global cryptocurrencies: $3.04 trillion (down 4%)
• Bitcoin market dominance: 57.1%
• Ethereum market share: 11.3%

Technical Analysis and Historical Cycle Warnings

From a technical analysis perspective, Bitcoin's recent price movements are remarkably similar to the pattern observed in April 2024. Korbot Labs analysis points out that at that time, Bitcoin rebounded above $70,000, then fell back to $57,000 in May, and further dipped to $67,000 in June, forming a typical double top structure. The current price has failed to stabilize after breaking through $90,000, similarly facing the risk of forming a similar structure, which increases the possibility of future consolidation or further retracement.

More pessimistic analysts warn that if Bitcoin effectively breaks below the key support level of $80,000, it could trigger a larger “washout” fall. A technical analyst stated on social media: “Bitcoin is off to a bad start this week! It's getting closer to forming a 2-1-2 daily level measurement move target. If it successfully breaks below $80,000, it could lead to a 'washout' trend. If selling pressure continues until the end of the year, it could drop to $48,000.” This target level implies a drop of about 45% from the current price, which will test the psychological defenses of many long-term investors.

The support level analysis shows that there is a large amount of institutional buying chips in the range of $80,000 to $82,000, which is a key defensive area recently. If this area is lost, the next important support level will shift down to the range of $68,000 to $72,000, which is also an important consolidation platform for Bitcoin before its breakout in October. From on-chain data, there is a concentration of costs for a large number of short-term holders around $85,000, and a break below this level may trigger a surge in stop-loss orders.

Capital Rotation and Market Sentiment Shift

The recent fall of Bitcoin sharply contrasts with the strong performance of traditional safe-haven assets, as silver prices soared vertically while Bitcoin underwent a significant correction. This divergent trend has sparked discussions in the market about capital rotation. Analyst Macrobysunil pointed out on social media: “As Bitcoin has just erased most of last week's gains, silver is breaking through with great momentum. Capital is choosing real assets over speculative assets. The rotation signal is loud: paper wealth → hard currency, digital risk → monetary metals.”

This theory of capital rotation has appeared multiple times in history. Typically, when market uncertainty increases, investors shift from high-risk assets to traditional safe-haven assets. The strong performance of gold and silver, combined with the weakness of Bitcoin, may suggest that some investors are reassessing the risk-reward ratio of various assets. However, this theory remains controversial, as Bitcoin has repeatedly demonstrated its ability to quickly recover from significant sell-offs in the past few years.

From the market sentiment indicators, the Fear and Greed Index has retreated from the extreme greed zone but has not yet entered the extreme fear state. The cautious attitude in the derivatives market had already manifested before the big dump, with futures premiums consistently below neutral levels and the put/call ratio remaining high. This proactive risk prevention awareness may have mitigated the impact of this big dump, but it also reflects institutional investors' uncertainty about the market outlook.

MicroStrategy Strategic Turning Point

As the Bitcoin market experiences significant volatility, MicroStrategy's dynamics have also drawn heightened attention. Executive Chairman Michael Saylor's “green dot” tweet posted on social media has sparked various interpretations, with the tweet accompanied by a chart of the company's Bitcoin holdings, showing a total of 649,870 Bitcoins purchased over 87 times, with a total value of $59.45 billion and an average cost of $74,433. The orange dots mark each increase in holdings, while the green dashed line indicates the average purchase price.

The crypto community has divergent interpretations of the meaning of “green dots.” Most analysts believe this suggests that the company will accelerate Bitcoin purchases, as MicroStrategy currently has the capital, conviction, considerable net asset value, and cash flow to support ongoing acquisitions. However, there are also views that this could point to other corporate actions such as stock buybacks or asset restructuring. This ambiguity reflects Saylor's consistent communication style, with supporters viewing it as a strategic signal, while skeptics see it merely as a marketing tactic to attract attention.

What is more noteworthy is that MicroStrategy CEO Phong Le publicly acknowledged for the first time that the company might consider selling Bitcoin under specific crisis conditions, which deviates from the company's consistent “never sell” philosophy. He explicitly stated that the company would only consider selling if two trigger conditions are met simultaneously: the company's stock price falls below 1 times the modified net asset value (mNAV) and it is unable to raise new capital through equity or debt. As of November 30, the company's mNAV is close to 0.95, not far from the warning line.

Sustainability Challenges of Corporate Bitcoin Strategies

MicroStrategy's financial pressures have brought new uncertainties to its Bitcoin strategy. The company issued perpetual preferred stock to fund its Bitcoin acquisitions, requiring quarterly dividends on the 8.00% Series A perpetual preferred stock to be paid starting March 31, 2025, according to the official press release. These ongoing obligations have increased liquidity pressures, especially in the context of declining market acceptance for new issuances.

The modified net asset value (mNAV) indicator has become a key metric for assessing MicroStrategy's financial health, measuring the ratio of the company's enterprise value to its Bitcoin holdings. If the mNAV falls below 0.9, MicroStrategy may be forced to liquidate some Bitcoin to meet its preferred stock dividend obligations of $750 million to $800 million annually. This policy shift introduces a quantifiable risk threshold, leading analysts to now view MicroStrategy as akin to a leveraged Bitcoin ETF: benefiting from appreciation in a bull market, but facing amplified risks during periods of liquidity tightening.

According to the company's financial performance for the third quarter of 2025, as of October 26, MicroStrategy holds approximately 640,808 Bitcoins, with an original cost basis of $47.4 billion. By November 30, this increased to 649,870 Bitcoins, showing that acquisitions are continuing despite market volatility. However, the company's stock price has fallen more than 60% from recent highs, revealing the gap between Bitcoin gains and shareholder returns. This gap affects mNAV calculations and raises questions about the sustainability of the strategy.

Market Outlook and Investment Strategy

The current Bitcoin market is in a complex situation of technical breakdown and institutional signal contradictions. From a short-term trading perspective, $87,000 has become a key watershed in recent times. If it can quickly recover and stabilize, it may alleviate further downward pressure; on the contrary, if it continues to lose ground, the next target level will point to the range of $83,000 to $85,000. Investors should closely monitor changes in leverage in the derivatives market to avoid excessive exposure in a heightened volatility environment.

For medium to long-term investors, this pullback may provide an opportunity to build positions in batches, especially in the strong support area between $80,000 and $85,000. Historical data shows that during the Federal Reserve's policy shift cycles, Bitcoin typically experiences volatility in the first 3-6 months, but performs strongly in the following 12-18 months. In terms of asset allocation, it is recommended to keep the cryptocurrency exposure within a manageable risk range and consider adopting a dollar-cost averaging strategy to smooth out the impact of market fluctuations.

From a risk management perspective, investors need to pay special attention to two major catalysts: first, the changes in the mNAV indicator of MicroStrategy; if it continues to stay below 0.9, it may trigger market concerns; second, the flow of funds in Bitcoin ETFs; if institutional funds continue to flow out, it may extend the adjustment period. At the same time, maintaining a certain proportion of cash reserves is crucial, as this not only helps to cope with sudden market fluctuations but also allows for capturing undervalued opportunities during extreme market conditions. In an uncertain environment, maintaining strategic patience and tactical flexibility is key to navigating through cycles.

Market Game and Value Re-evaluation

The recent flash crash of Bitcoin coincided with a strategic turning point for MicroStrategy, revealing the typical characteristics of the cryptocurrency market's transition from speculative frenzy to rational investment. When the largest institutional holders begin to discuss selling conditions, the market must reassess the feasibility boundaries of Bitcoin as a corporate reserve asset. Although this maturation process is accompanied by growing pains, it is beneficial for building a healthier market ecosystem in the long run.

From a broader perspective of asset rotation, the phase divergence between Bitcoin and traditional safe-haven assets is not an unusual phenomenon. During periods of heightened macroeconomic uncertainty, funds typically oscillate between high-risk assets and traditional safe havens until a new equilibrium is established. The strength of silver and the weakness of Bitcoin may simply be a temporary manifestation of this rotation process, rather than a complete reversal of a long-term trend.

For market participants, the key is not to predict short-term price fluctuations, but to understand the long-term trends of technological change and the evolution of the monetary system. The volatility of Bitcoin is an inherent characteristic of its emerging asset class, and the increasing involvement of institutions is gradually changing its price formation mechanism. During the current adjustment period, maintaining the ability to learn, diversifying investment risks, and adhering to a long-term perspective may be the most reliable strategies to cope with market uncertainty.