Bitcoin ($BTC) whales are reportedly in an ongoing “accumulation trend” even as the Crypto Fear & Greed Index signals there’s currently “extreme fear” on the market as investors divest of their holdings while prices drop.
According to data from on-chain analytics firm Santiment shared on social media, wallets holding between 10,000 and 100,000 BTC have been adding their holdings since April 30 and considerably increased their accumulation after the price of the flagship cryptocurrency started breaking down this month.
The price of Bitcoin plunged from a high near $40,000 earlier this month to a low under the $30,000 mark after Terra’s UST stablecoin lost its peg to the U.S. dollar and dipped to a $0.61 low after a series of withdrawals on its Anchor Protocol, which rewards UST deposits with high APYs, led to a sell-off.
In response, the Luna Foundation Guard, the custodian of Terra’s Bitcoin reserves, has deployed 28,205 BTC to defend the peg of the protocol’s UST stablecoin. The funds are set to provide liquidity on exchanges and led to a modest recovery in UST’s price, which surged from its $0.61 low to $0.94 before falling again. The BTC LFG deployed is also believed to be adding selling pressure on the market.
Other factors, including rising interest rates and a sell-off in equities markets, are also pushing the price of the flagship cryptocurrency down. As CryptoGlobe reported, analysts with Bank of America have noted Bitcoin hasn’t been acting as an inflation hedge over the last few months as it has been moving in tandem with the stock market.
Bank of America’s analysts expect the correlation between BTC and equities to remain in the near future. Moreover, while bitcoin has often been compared to gold, the correlation between the flagship cryptocurrency and the precious metal has dropped to near zero since June 2021, and has kept trending down.
The popular Crypto Fear & Greed Index has recently dropped to 10, signaling “extreme fear” in the market. According to the index’s page, extreme fear “can be a sign that investors are too worried,” which “could be a buying opportunity.”
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