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Large institutions are forced to offload Bitcoin in crypto winter.
In a Twitter thread on Thursday, Vetle Lunde, an analyst at digital asset analysis firm Arcane Research reveals that large institutions have sold at least 236,237 BTC since May.
“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,” Lunde wrote at the beginning of the thread. “The 236,237 BTC number is derived from massive institutional blow-ups and other large known selling seen in the last two months. The number does not account for other natural capitulation and hedging activity that usually occurs during crypto bear markets.”
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
Lunde notes that it started with Terra selling over 80k BTC to save the Terra USD (UST) peg. Meanwhile, public miners, on their part, sold a total of over 19k BTC, selling about 4,400 in May and about 14,600 in June as the market conditions worsened, necessitating the sale of their BTC rewards to improve liquidity.
Additionally, Lunde estimates that the sale of 75% of their Bitcoin holdings by Tesla amounts to about 29,060 BTC. Notably, as Celsius revealed struggles with insolvency concerns, an unknown entity redeemed 24,510 BTC on the Canadian purpose ETF. Furthermore, in July, Celsius, through DeFi loan repayments, freed up 21,962 WBTC.
It is worth noting that while Lunde believes that the selling during this period far exceeds his estimates, he believes that contagion-related selling is done for now. According to the analyst, he expects the markets to range in the short term. Furthermore, Lunde adds that he expects macroeconomic conditions and crypto market correlation with US equities to be the key market drivers.
However, the analyst notes that correlation is likely to drop as large corporate institutions like Tesla reduce their stake in the market. After a difficult couple of months, the crypto markets staged a rally over the last few days, pushing the market cap above $1 trillion following an unexpected boost in social media sentiment.
At the time of writing, the crypto market has gained 2.5% in the last 24 hours, sitting at the $1.06 trillion mark. Notably, Bitcoin is trading above the $23k price point, while Ethereum has clinched the $1,600 price point. Both are up 11.49% and 31.84%, respectively, in the last seven days.