Justin Sun maintains his reputation as one of the biggest whales in the vast Bitcoin and altcoin world. While his breakthroughs continue to be documented, a series of recent transactions uncovered by CryptoQuant CEO Ki Young Ju could tarnish his reputation. BTC bulls, meanwhile, failed to break through critical resistance following positive US inflation data, leaving the door open for further losses. According to experts, the decline may be limited as Germany’s holdings of BTC are dwindling.
Justin Sun’s long Bitcoin positions
Earlier media reports had revealed that the HTX reserve was showing some suspicious tendencies. Following this revelation, Ki Young Ju has moved to investigate the ongoing process. The CryptoQuant CEO claims that the previously referenced whale linked to the HTX reserve is Justin Sun. He went further by stating that Sun made a long trade into Bitcoin when the price was $67,000. According to his research, he estimates Sun’s total position at $420 million. In this context, Ki Young Ju made the following post:
This HTX whale was Justin Sun. He opened a long Bitcoin at $420 thousand dollars with a position of at least 67 million dollars. His USDT reserves are about $24 million. Where did all this collateral come from? He used $460 million worth of stUSDT. This is his stablecoin project with 46% APY. 89% of the supply is on HTX.
However, Ki Young Ju later deleted this post. He then said, “I deleted the post to clarify some things with the HTX team. I will share their views on PoR after our discussion.”
Crypto whale Justin Sun’s transactions raise questions!
While similar transactions linked to Justin Sun are not uncommon, the fact that HTX liquidity is only $24 million is problematic. This suspicious trend doesn’t end there, as Sun allegedly backed his Bitcoin trading with $460 million worth of stUSDTs. Related risky bets based on borrowed collateral have previously created suspicious trends in the crypto ecosystem. Recall that Curve Finance co-founder Michael Egorov was subjected to serious CRV liquidations a few weeks ago. In an environment where the Bitcoin price maintains $57,864, the risk of unannounced liquidations is high.
However, stUSDT has been confirmed to be a stablecoin linked to Justin Sun. While Ki Young Ju did not directly allege market manipulation practices, he did ask where the collateral backing the Bitcoin bets came from. He showed that this can be difficult to detect. This is because 89% of the stUSDT supply is locked on HTX.
Bitcoin bulls fail again!
Thursday was an important day for the crypto markets. Because despite the positive US inflation report, Bitcoin failed to break through an important resistance. Moreover, it continued the downward trend observed since early June. As you have been following on Kriptokoin.com, on Thursday, after the US CPI reported its first decline in four years, the markets quickly raised their bets on a Fed rate cut. This in turn supported higher-risk assets, including BTC.
For a moment, it appeared that Bitcoin bulls would establish a foothold above the descending trendline, characterizing a sell-off from the June highs near $72,000. Such a move could have signaled the end of the pullback. It could also have attracted momentum investors, as discussed on Thursday’s First Mover America. However, bullish hopes were quickly dashed as prices turned down from trendline resistance and fell below $57,000 earlier today.
There is still hope for BTC!
The oversupply from Germany that caused the price drop earlier this month is almost exhausted. In addition, Mt. Gox’s creditors, it remains unclear what percentage of the 95,000 BTC will be liquidated, representing a fraction of the total 140,000 BTC scheduled to be distributed. Crypto main broker FalconX gave the following assessment in a bulletin published on Friday:
The prospect of some of the $16.3 billion in FTX repayments turning into buying pressure in the coming months, the increasingly positive stance towards crypto on both sides of the aisle, and the potential for a rate cut in September that would benefit risk assets more broadly should encourage medium- and long-term bulls.
FalconX is a potential hedge against Mt. Gox’s creditors’ potential sales may have a different profile than Germany’s, FalconX added. “For example, perhaps more flows will go to exchanges versus professional liquidity providers, or perhaps a more diversified holder base will reduce sales over time,” FalconX said.
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