It all started with Do Kwon and LFG
Preview
Initial miner selling in May
Markets soured, and public miners were pressured to initiate the selling of their precious BTC holdings in May.Preview
Tesla
Some time in between and amidst this. Tesla sold 75% of its BTC stack. We estimate Tesla’s sales to be 29,060 BTC at an average price of $32,209.Preview
CPI-surprise
Enter June 10th, and the U.S. CPI surprise. Correlation sent prices south, bankrupting several whales already under pressure post Luna’s collapse. On June 12th, Celsius halted withdrawals, and rumors regarding 3AC’s meltdown murmured. Leaked court documents have revealed that 3AC owes lenders 18,193 BTC and a GBTC equivalent of 22,054 BTC.Preview
Purpose liquidation
Preview
Miner selling intensifies in June
Markets got bleaker, and the small selling pressure from BTC miners in May grew big in June. Public bitcoin miners sold 14,600 BTC in June.Preview
Celsius preparing for Chapter 11
Celsius’ prepared for Chapter 11 and repaid its DeFi loans, freeing up 21,962 WBTC in early July.Preview
The issue with macro on-chain indicators
In late April, I tried to challenge the view of certain macro on-chain indicators. Most of the selling pressure since May has originated from sources not necessarily reflected in exchange balances and sources I mentioned when looking into how the “productification” of bitcoin might impact the market.Preview
So where are we now?
The last 2 months have been an obvious capitulation. Most of the selling of the 236,237 BTC mentioned above has been forced selling, and it’s likely been worse than what this research covers with underwater retail and institutions capitulating. The Chapter 11s, 3AC court documents, normalization of the stETH/ETH price, and the relief rally seen in the last few weeks tell me that contagion is getting resolved. Less uncertain times ahead.Preview
Contagion done for now
I tend to lean in favor of forced selling and contagion-related uncertainty being done for now. Markets will normalize. We will likely slump, pump, and dump in choppy conditions in the coming period, and macro and correlations will possibly resume being the key force of the market.Preview