According to an analyst at Arcane Research, the steep decline in the price of Bitcoin since May appears to have been caused by large institutional sell-offs.
Since May 10, “big institutions” have sold up to 236,237 Bitcoin (BTC), valued at $5.452 billion at the time of writing, most often as a result of forced selling.
Vetle Lunde, an analyst at Arcane Research, detailed how and when many institutional Bitcoin investors started dumping their holdings in a post on Twitter. “It all started with Do Kwon,” said Lunde.
It began with LUNA dumping 80,081 bitcoin in May
In an unsuccessful attempt to maintain the peg of its TerraUSD Classic (USTC) stablecoin in May, the Luna Foundation Guard (LFG), which managed the finances for the Terra project, dumped 80,081 BTC.
Some Bitcoin miners appear to have felt pressured to sell after Terra’s collapse. Lunde calculates that during May and June, miners sold 19,056 coins.
When selling more than their monthly output, miners in certain circumstances were probably using reserves.
According to Lunde, Elon Musk’s Tesla also clicked followed suit and sold 29,060 bitcoin at the end of Q2 when miner selling reached its high.
The Three Arrows Capital (3AC) cryptocurrency investment company was also over-leveraged and owes lenders 18,193 BTC as well as other currencies worth 22,054 BTC.
Despite intense sell pressure from institutions on the cryptocurrency markets, the BTC market has been impressively resilient.
Additionally, compared to the height of the 2017 bull market, trading volumes have stayed greater until the 2022 market slump. According to CoinGecko, the daily trade volume for BTC peaked on December 17, 2017, at $12 billion, and peaked at over $20 billion per day in July 2022.