As we reflect on last month, we may need to refer to it as Manic May, with huge volatility in the crypto market. As part of BEQUANT's Monthly market research report, the team here have looked at total daily liquidations, stablecoin supply and bitcoin in money addresses. 

Totally Daily Liquidations

Emiliano Bruno, Research Analyst at BEQUANT said, “On May 12th, triggered by Terra and the macro backdrop, liquidation of levered traders hit $1.22 bn, the highest since January, as bitcoin fell to $26.7k, and the crypto market cap slid by 16%.”

“Positioning was long and traders were carried out on contagion from the Terra turmoil as it was expected that the Luna Guard Foundation would use its BTC reserves to defend the stablecoin.”

Stablecoin Supply

Emiliano Bruno, BEQUANT’s Research Analyst said, “A by-product of the algorithmic stablecoin turbulence was de-risking and net reduction in stablecoin exposure, with centralized Tether (USDT), viewed as the riskiest, facing almost $10 bn in redemptions as it briefly lost its peg.”

“Centralized stables like USDT and USD Coin (USDC) are pegged 1:1 to the USD and are meant to hold reserves to back each coin, but Tether has the lowest exposure to cash and cash-equivalents.”

BTC in Money Addresses

Emiliano Bruno, Research Analyst at BEQUANT said, “The number of bitcoin addresses in the money reached lows not seen since March of 2020 after achieving dizzying heights last year.”

“The low level of in-the-money addresses points to capitulation, bearing in mind lower lows were seen in the 2015 (30%) and 2018 (45%) bear markets.”