Bitcoin is facing a year of decline, and according to a Arcane search, the main trigger for the selling pressure was caused by a large dump of cryptocurrencies by institutional whales. According to a tweet from Arcane Research, many institutional Bitcoin holders have started selling their cryptocurrencies and this has increased the selling pressure even further.
“236,237 Bitcoins. This was the amount of bitcoins that have been sold since May 10 by large institutions. Most sales are related to forced sales, some are not.”
236,237 BTC. That’s the amount of known selling of bitcoin since May 10th by large institutions. Most of the selling is related to forced selling, and some is not. pic.twitter.com/wNLjgvvFmn
— Vetle Lunde (@VetleLunde) July 21, 2022
Kitten
According to research, “it all started with Do Kwon”, andThis is a reference to the CEO of Terraform Labs, responsible for the creation of LUNA and TerraUSD, two cryptocurrencies that recently collapsed and, not only caused millions of losses for their investors, but also created a gigantic selling pressure that brought down the price of the cryptocurrencies. According to the research, by trying to use their Bitcoin reserves to save the doomed currency, this started a huge sell pressure movement.
“It all started with Do Kwon. When Luna Foundation Guard (LFG) reached its initial target of $3 billion Bitcoin reserves, it took just 5 days for the UST’s dollar backing to be in tatters and the reserve of 80,000 Bitcoins was used in a desperate attempt. to save the currency. Luna plummeted, starting a contagion of more sales.”
It all started with Do Kwon. As LFG reached its initial $3bn BTC reserves target, it took 5 days before UST’s peg was in shambles, and the 80k BTC reserve was deployed in a desperate attempt to save the peg. Luna collapsed, leading to contagion and more sell-side pressure. pic.twitter.com/wZvqCKn9XW
— Vetle Lunde (@VetleLunde) July 21, 2022
selling pressure
In addition to the direct selling pressure on the crypto market, affecting institutions that had a good amount of cryptocurrencies, the LUNA case also put a lot of pressure on miners, which is also another point that makes the coin price find it very difficult. to stay above support levels. Earth’s collapse appears to have caused some bitcoin (BTC) miners to face a lot of selling pressure. Estimate that mining farm managers sold 19,056 BTC between May and June.
In some cases, miners have sold more than their monthly production, likely taking Bitcoin out of their reserves. Lunde also added that the exchange-traded fund Canadian Purpose Bitcoin (ETF) had a massive redemption of 24,510 BTC at the end of June, “creating additional pressure on the market”. This redemption represented 51% of the assets of this ETF. These are all signs of a market that is in a big FUD cycle. However, during the last week and so far the crypto market has had an encouraging recovery, especially Ethereum, which could mean a reversal of this trend of selling pressure.
