Has the worst in the crypto market already passed, or is it still ahead?
Looking at market positioning, risk assets have kicked off 2026 with some momentum, showing a noticeable uptick. Still, it may be too early, or too optimistic, to call this the start of a trend reversal just yet.
At the center of the action is Strategy [MSTR]. Technically, MSTR has started the New Year with a 3.43% rally, with Bitcoin [BTC] gains clearly feeding into its stock price. That said, it’s still far from smooth sailing.
So far, what’s behind MSTR is a multi-billion-dollar Q4 loss.
Basically, the company is expected to report a massive hit after Bitcoin’s 24% drop wiped out a $2.8 billion profit from Q3. Shares fell 48% in 2025 and are 70% below their November 2024 peak, fueling growing concerns.
As a result, analysts are projecting full-year operating results between a $7 billion loss and a $9.5 billion profit. However, with Bitcoin ending the year near $87,600, the numbers are likely to land toward the lower end.
In short, skepticism around MSTR’s Bitcoin model is back in full force. Now, as the company braces for a massive Q4 loss, the big question is: Could this spark Bitcoin’s first major flash crash of early 2026?
MSTR’s multi-billion losses signal flash crash risk
Flashback to the October crash, it wasn’t random.
Instead, smart money strategically exited ahead of MSCI’s announcement about MSTR potentially being excluded from the index, given its Bitcoin-heavy treasury holding of over 671k BTC.
Now, with Q4 performance in the books, another shakeup can’t be ruled out. In fact, as the chart below shows, Strategy shares have just posted their first six-month losing streak since adopting a Bitcoin strategy in 2020.
Taken together, that adds up to a whopping 134% loss.
Consequently, MSTR’s technical weakness is now showing on paper, with its Q4 report expected to highlight these massive losses and, in turn, raise questions about the sustainability of its Bitcoin model.
Looking ahead, a market frenzy is likely around the report. Moreover, with caution still in place, and BTC down roughly 25% from pre-October crash highs, another flash crash remains very much on the table.
Final Thoughts
- Multi-billion-dollar Q4 loss and technical weakness raise doubts about the sustainability of MSTR’s Bitcoin-heavy model.
- With BTC down 25% from pre-October highs and market caution still intact, another early-2026 flash crash remains a possibility.
