The fall in cryptocurrency prices has affected all investors as summer approaches. Institutions have fueled liquidation cascades: they’ve reportedly sold more than 230,000 bitcoins in the past two months, according to a new report. We take a look at the trend, which could be on its way to resolution.
Institutions have massively sold their bitcoins
Last week, it was a surprise to learn that Tesla had sold 75% of its bitcoins (BTC) in the second quarter. And Elon Musk’s company isn’t the only one to get rid of its cryptocurrencies: institutions have been having a real sell-off for the past two months, according to data presented by Arcane Research.
As the report reminds us, it all started with the Terra (LUNA) deal. Luna Foundation Guard’s BTC reserves were wiped out on May 9, leading to a series of consequences within the ecosystem.
The first to be affected by the selling pressure were the miners. These got rid of 4,456 bitcoins over the month of May. Then Tesla followed, as Bitcoin approached $30,000. In total, the sale would have reached $935 million, according to estimates.
FUD then spread throughout the crypto ecosystem, and major players began to run into trouble, fueling the trend. As a result, Celsius suspended withdrawals, Three Arrows Capital collapsed, and the Bitcoin price continued to plunge.
As a result, miners sold an even larger amount in June, which amounted to 14,600 bitcoins.
Are we out of the capitulation phase?
Arcane Research’s report notes that all of this data is likely just the tip of the iceberg:
“Most of the sales of the 236,237 bitcoins mentioned above were forced, and it was probably worse than this study mentions, with hidden capitulations by private and institutional players.”
So are we out of the worst? That’s the interpretation of this report: the declarations of bankruptcy have been acted upon, and the last few weeks have finally seen some closings in the green for cryptocurrencies:
“The contagion is being resolved, we are moving towards less uncertain times.”
Proof of this renewed optimism: the BTC came to a stop on the 25,000 dollars last week, while it struggled until then to stay above the 20,000 dollars.
So we feel a little more optimistic wind blowing in recent weeks, after the uncertainty and massive capitulations. However, the BTC price has a long way to go before it reaches its all-time high of $69,000 again.
