Is it still too early to call the current risk-off phase anything apart from a full-blown bear market?
Looking at the hard data, it increasingly makes sense to compare this cycle with 2022, which remains the worst Bitcoin bear market on record, with BTC closing the year down over 65%.
That said, Q3 could be the deciding factor, especially after Q2, when BTC is already down over 12%.
As the chart below shows, the stakes for Q3 are high. Technically, Bitcoin hasn’t printed three consecutive bearish quarters since the 2022 cycle.
But after a 22% drawdown in Q1 and 12.2% in Q2, another negative Q3 would start to shift this from a cyclical pullback into something closer to a structural downtrend.
Bitcoin bears gain ground as Strategy’s risks build
The whole value proposition of digital treasuries (DATs) really comes down to creating shareholder value.
The logic is simple: Unlike holding Bitcoin or gold, where upside is purely driven by price appreciation, these DATs aim to generate value through things like share buybacks, dividends, and broader capital allocation strategies that actively return capital to shareholders.
STRC is no exception, with its 11.5% dividend yield.
That said, STRC looks set to close Q2 with its weakest cycle on record, down nearly 25%. This comes alongside pressure in MSTR, with the stock recently slipping below $85.50.
Strategy is sitting on about a $14 billion unrealized loss, while its 11.5% dividend comes out to roughly $1.2 billion in annual payouts.
In other words, Strategy’s ability to sustain STRC’s dividend now becomes a key test.
Against this backdrop, it’s no surprise STRC has come under heavy selling pressure as shareholder value weakens. While Arkham Intelligence has ruled out a Terra-LUNA-style collapse, the stock’s weakness still raises questions about Strategy’s ability to keep buying Bitcoin.
From a market perspective, that keeps the risk of deeper capitulation in play.
If that happens, BTC could easily end Q3 in the red, putting it on track to post its first three consecutive bearish quarters since the 2022 bear market.
Final Summary
- Bitcoin could post its first three straight bearish quarters since 2022 as selling pressure continues to build.
- STRC’s sharp decline and Strategy’s growing unrealized Bitcoin losses are raising concerns over dividend sustainability and future Bitcoin purchases.