TD Cowen Downgrades Strategy to $440 Amid Bitcoin Profitability Concerns

VADODARA, January 15, 2026 — Research and brokerage firm TD Cowen has lowered its price target for Strategy to $440 from a previous $500, according to a report by The Block. This daily crypto analysis examines the implications of the downgrade, attributed to dilution from continued issuance of common and preferred shares alongside weakened Bitcoin profitability, as the broader market tests critical liquidity levels.

Market Context & Background

Market structure suggests this downgrade mirrors patterns observed during the 2021 correction, where institutional price target reductions preceded significant liquidity grabs in crypto-correlated assets. Historical cycles indicate that when brokerage firms adjust targets due to Bitcoin profitability concerns, it often correlates with increased volatility in the $90,000-$100,000 range. Similar to the 2021 cycle, current on-chain data shows elevated UTXO age bands among long-term holders, creating potential sell-side pressure if profitability metrics deteriorate further. This development occurs amid broader regulatory uncertainty, as seen in recent shifts in U.S. crypto legislation that could impact institutional inflows.

What Happened?

On January 15, 2026, TD Cowen formally revised its price target for Strategy downward by 12%, from $500 to $440. According to The Block's reporting, the downgrade stems from two primary factors: dilution of stock value through ongoing issuance of common and preferred shares, and weakened Bitcoin profitability metrics. This adjustment reflects a recalibration of institutional expectations, as Bitcoin's current price action around $96,934 tests key psychological and technical levels. The Federal Reserve's monetary policy stance, detailed in official Federal Reserve documentation, continues to influence profitability calculations through its impact on risk-free rates and capital costs.

Technical Analysis & Price Action

Bitcoin's current trading at $96,934 represents a critical test of the $97,000 liquidity zone. Market structure suggests the presence of a Fair Value Gap (FVG) between $94,500 and $96,000, which must be filled for healthy price discovery. The Relative Strength Index (RSI) on daily charts shows neutral momentum at 52, while the 50-day moving average provides dynamic support near $94,200. Volume Profile analysis indicates significant accumulation between $92,000 and $95,000, creating a strong order block that must hold to maintain bullish structure. Bullish Invalidation is set at $94,500—a break below this level would signal failure of the current uptrend. Bearish Invalidation rests at $99,500, where a sustained move above would confirm renewed institutional confidence.

By The Numbers

Why It Matters

This downgrade matters because it signals institutional reassessment of Bitcoin's profitability in traditional equity frameworks. For institutions, diluted stock value through share issuance reduces earnings per share (EPS) projections, directly impacting valuation models for crypto-correlated strategies. Retail investors face increased volatility as these adjustments filter through to market sentiment, potentially triggering stop-loss cascades near key technical levels. The weakened Bitcoin profitability component reflects concerns about mining economics post-halving and regulatory overhead, which could suppress institutional inflows forecasted in analyses like the JPMorgan 2026 outlook.

Community Sentiment

Market analysts on X/Twitter highlight the dilution aspect as a bearish signal for equity exposure to crypto assets. One quantitative trader noted, "TD Cowen's move reflects the gamma squeeze risk in derivatives markets when profitability metrics diverge from price action." Bulls argue that the $440 target still represents significant upside from current trading levels, suggesting the adjustment is a tactical recalibration rather than a structural bear call. Bears point to the continued share issuance as evidence of capital desperation, mirroring patterns from previous market tops.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds above the $94,500 invalidation level and profitability metrics stabilize through improved transaction fee revenue or layer-2 adoption, Strategy could re-rate toward the original $500 target. Market structure suggests a rally toward $102,000 is possible if the FVG is respected and on-chain accumulation continues.

Bearish Case: A break below $94,500 would confirm the bearish invalidation, potentially driving Strategy toward $400 as dilution concerns amplify. Weakened Bitcoin profitability could trigger a liquidity grab down to the $92,000 order block, aligning with historical corrections where institutional target reductions preceded 15-20% drawdowns.