A research firm has broken down how the Bitcoin price has reacted to purchases Michael Saylor’s MicroStrategy has made over the years.

MicroStrategy’s Bitcoin Purchases Have Been Followed By Negative Price Action

K33 Research, formerly Arcane Research, has released a new analysis piece that looks into how the market has been impacted by each buying spree that MicroStrategy has gone on.

The research firm has found that Bitcoin has usually observed an upside during the periods MicroStrategy has been making its purchases. Note that by during, what is meant here is the actual dates the purchases happened and not when the announcements were made.

Here is a chart that displays the returns of Bitcoin during each of the periods where MicroStrategy purchased at least 1,000 BTC over the last few years:

As shown in the above graph, while it hasn’t been the case every time, these periods have still tended towards positive returns for the cryptocurrency. The latest purchase, where the company acquired 6,455 BTC (and also made a repayment of its Silvergate loan in full), saw the coin surge by 17%.

On average, Bitcoin has seen positive returns of about 6.2% during these buying periods. This trend naturally makes sense, as the research firm noted that MicroStrategy’s purchases act as a constant buying presence in the market.

Now, the more interesting trend becomes visible when looking at the returns of the asset that followed immediately after MicroStrategy made formal announcements of their purchases. The below chart shows how BTC performed on the same day as these announcements, as well as how it did a week after them, over the last few years.

Unlike the purchasing periods, the announcements made by MicroStrategy have usually seen a negative reaction from the market. On the days the company made these announcements, the price has taken a 2.2% hit on average. Regarding weekly returns following the announcements, the average returns have been negative, but only slightly so at -0.2%. Following the news of the latest purchase from the firm, Bitcoin has seen a 3% drop

As for why these red returns have usually been observed following such announcements, K33 Research explains, “this market reaction may be caused by market participants absorbing the information that a known large buyer has finished, meaning less buy-side liquidity to support further upside.”

Back in September, MicroStrategy penned a Sales Agreement with Cowen and BITG, which allowed them to issue and sell shares at an aggregate price of up to $500 million.

So far, the firm has issued and sold $385.8 million worth of shares, meaning they can only issue and sell shares worth $114.2 million to buy more Bitcoin.

“Thus, while MicroStrategy managed to prepay its Silvergate loan at a 25% discount, the market is pricing in that a known large buyer has less short-term gunpowder left to generate upside momentum,” notes the research firm.

BTC Price

At the time of writing, Bitcoin is trading around $27,900, up 1% in the last week.