Bitcoin Extends Sell-Off Despite Luna Buying, Strong On-Chain Data

Source: Adobe/James Thew

Bitcoin (BTC) and other major cryptoassets fell sharply over the past day, as stock markets around the world reversed earlier gains to losses after the US Federal Reserve (Fed) raised rates by 50 basis points. The sharp fall came despite massive bitcoin buying by Luna Foundation Guard (LFG).

At 11:23 UTC, BTC stood at USD 35,917, down 9% for the past 24 hours and almost 10% for the past 7 days. At the same time, ethereum (ETH) traded at USD 2,685, down over 8% both on a daily and weekly basis

The selling pressure in bitcoin over the past day did not ease even as news emerged that Terra (LUNA) founder Do Kwon’s Luna Foundation Guard had purchased USD 1.5bn worth of BTC on the market. The latest purchase happened with the help of crypto hedge fund Three Arrows Capital, Do Kwon confirmed on Twitter.

The foundation’s buying is part of an effort to partially back Terra’s stablecoin UST with BTC. Do Kwon has previously stated that he wants to buy as much as USD 10bn worth of bitcoin for the task.

“For the first time, you’re starting to see a pegged currency that is attempting to observe the Bitcoin standard. It’s making a strong directional bet that keeping a lot of those foreign reserves in the form of a digital native currency is going to be a winning recipe,” Do Kwon was quoted by CNBC as saying on Thursday.

The massive buying from Do Kwon’s LFG quickly became a topic of discussion in the crypto community on Twitter:

On-chain fundamentals remain strong

Meanwhile, on-chain data from the blockchain analytics provider Glassnode showed that the amount of BTC that has not moved in over a year reached an all-time high in April, with more than 64% of all BTC in circulation.

Commenting on the finding, Noelle Acheson, Head of Market Insights at Genesis Tradingsaid that the data point shows that BTC is being held for the long-term, adding that this is “very hard to game.”

With the amount of BTC not moving in a year at an all-time high, it is “definitely not nothin’,” Acheson said.