The price of bitcoin seems to have taken a significant hit in the recent past and is also likely to rise above $25,000. However, according to a report, there was a huge drop in BTC price as institutions and whales steadily liquidated their holdings since the market collapse in May 2022.
Hence, this is expected to impact the upcoming price rally to a great extent as they may use all their resources to keep the price consolidated.
Institutional investors and whales are generally thought of as players who are bound to play in the long term and who are unaffected by short-term price action. However, the recent liquidity crunch within the sector may have alerted them as they are currently busy selling their stake.
According to the latest report, over 236K BTC were sold since the market collapse in May 2022. Moreover, according to a mysterious research analyst, this sell-off could be forced upon them.
Analysts point out that the sell-off was derived from institutions that were shaken by the Do-Kwon episode.
“As LFG reached its initial $3 billion BTC reserve target, it took 5 days for the UST peg to fall into disrepair, and 80K BTC reserves were deployed in a desperate attempt to protect the peg. LUNA collapsed , thereby increasing the pressure of the transition and further selling”,
Meanwhile, miners sold over 4000 BTC in May alone, some selling 100% of their production, registering a massive 25% to 30% increase. In addition, frequent events related to liquidity such as Celsius, Voyager filing for bankruptcy, and the recent dumping of 75% of its BTC by Tesla could reduce the value.
This prompted miners to sell their reserves, which rose to 14,600 in June, the highest ever. Currently, there has been a marked decline in the number of whales, reaching a two year low This time.
However, the analyst ended his series of tweets by saying,
“I lean on the side of uncertainty related to forced sales and contagion for now”,