- Arcane Research analyst Vetle Lunde showed how many institutional buyers of Bitcoin had liquidated since Terra’s devastation began.
- Since then, the epidemic has swiftly spread throughout the sector and intensified the selling pressure.
- The primary source of selling pressure in June was the increase in the CPI index.
Vetle Lunde’s Report on Bitcoin Sell-Off
In a recent post on Twitter, Arcane Research analyst Vetle Lunde showed how many institutional buyers of Bitcoin had liquidated since Terra’s devastation began, sinking the whole cryptocurrency market. He calculated that Tesla sold 29,060 BTC in May at an average price of $32,209. According to Lunde, the significant institutional collapses of the previous two months began with Terra’s demise on May 10, when Do Kown sell more than 80K BTC to protect the UST peg.
Since then, the epidemic has swiftly spread throughout the sector and intensified the selling pressure, resulting in the sale of 236,237 BTC by significant institutions. Lunde pointed out that the statistic does not consider other natural capitulations and hedging action that typically occurs during crypto downturns. Publicly traded miners were forced to liquidate 4,456 BTC worth of their Bitcoin holdings in the month due to pressure from the weakening markets. In Lunde’s estimation, Tesla liquidated 75% of its Bitcoin assets in the meantime, which amounted to 29,060 BTC. Tesla still has 9,686 Bitcoins, a decline from 43,053 on February 1, 2021.
Voyager And Celsius Declaring Bankruptcy
When Bitcoin surged in Q1 2021, Tesla liquidated 10% of its previous holdings for testing liquidity, lowering the EV giant’s new break-even price of BTC from $34,841 to around $33,325. As a result, when carrying out the significant sales in May of this year, Tesla just slightly lost money. The primary source of selling pressure in June was the increase in the CPI index, which caused the asset’s price to decline again and bankrupted some whales already under pressure following Luna’s fall. Lenders like Celsius and Voyager, which were already in difficulty, were affected by 3AC’s implosion, and both filed for bankruptcy the month after. According to leaked court records, the Singapore-based hedge firm owes lenders 18,193 BTC and other digital assets worth 22,054 BTC.
The market sell-offs were exacerbated by Canadian Purpose ETF redeeming 24,510 BTC between June 16 and June 20, in addition to the enormous liquidation of 3AC that caused the whole market to fall. As a result, on June 19, the price of the main cryptocurrency even fell below $17,700. Lunde declared that the previous two months had been a time of surrender. Due to underwater retail and institutions capitulating, the scope of the market selloff could have been worse than what he had reported. For the time being, he thought the relief rally was a sign that the contagion was ending as market apprehension decreased.
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