Bitcoin price action steadies, but things still look ugly for those with major skin in the game.
Bitcoin (BTC) found a new home at $36,000 into May 7 as volatility finally cooled into the weekend.
Terra down at least $250 million in crunch
Data from TradingView showed BTC/USD circling the $36,000 mark overnight after losing 12% in just 72 hours.
Still near its lowest levels since late February, the pair had nonetheless avoided a rematch of 2022 lows at the time of writing despite low-volume weekend market conditions.
In his latest Twitter update on May 6, popular trader Anbessa highlighted the planned support level to buy Bitcoin in what he described as a “fakeout” — a zone beginning at just under $33,000.
Twitter friendly, easy words
BTC support, BTC fakeout we want to buy. Chop very profitable it was. Now waiting for final HTF entry we do.
Superior we are. pic.twitter.com/Lt5XT5rRKw
— AN₿ESSA (@Anbessa100) May 6, 2022
While some eyed profit opportunities, however, there was no hiding others’ losses, notably those of the Luna Foundation Guard (LFG), the nonprofit organization attached to Blockchain protocol Terra which this week purchased $1.5 billion of BTC in over-the-counter deals.
According to data from on-chain monitoring resource BitInfoCharts, LFG was down over $240 million on its BTC stash at the time of writing, this not including the week’s latest purchase.
Terra and its co-founder Do Kwon remain committed to buying unlimited amounts of BTC to back their U.S. dollar stablecoin, TerraUSD (UST).
Bitcoin-skeptic gold bug Peter Schiff meanwhile suggested that whales were responsible for keeping BTC/USD at $36,000.
February buyers may have exited BTC positions
Analyzing possible reasons for the extent of Bitcoin’s losses beyond stock markets, on-chain analytics platform CryptoQuant noted that speculators may have had an overriding influence on the week’s proceedings.
Exchange inflows, it revealed on the day, had involved coins dormant for maximum three months, and thus likely to be owned by more speculative investors.
Three months ago, around the start of February, was when BTC/USD had begun rising rapidly after putting in its $32,000 lows. As such, those investors would have hit breakeven point this week.
“According to CryptoQuant data, the decline in the past two days may be dominated by short-term holders. On the 5th and 6th, a total of 11.76k “young” BTC held for less than 3 months flowed into the exchange,” journalist Colin Wu commented on the numbers.
Exchange inflow coin age chart. Source: CryptoQuant