German Government Sells Millions Worth of Confiscated Bitcoin: Impact on Market
The German government has recently started selling a significant amount of Bitcoin from a seized wallet, adding pressure to the cryptocurrency market and hindering a price recovery for Bitcoin. This move, along with increased selling activity from long-term whales, has contributed to the market’s volatility, preventing Bitcoin from surpassing $70,000 and retesting its previous all-time high.
Whales Selling and German Government’s Actions
According to blockchain analysis platform Arkham, the German government has begun offloading Bitcoin on various cryptocurrency exchanges. Approximately $65 million worth of BTC was transferred to two deposit addresses, including Coinbase, during a recent trading session. News reports indicated that the German government has already moved $600 million worth of BTC, with $130 million sent to exchanges like Kraken and Bitstamp. Arkham’s data reveals that the German government still holds around $3.05 billion worth of Bitcoin.
In January, the German police confiscated 50,000 Bitcoin, valued at $2.17 billion, from the country’s largest cryptocurrency seizure. This occurred after suspects voluntarily transferred the BTC to official wallets provided by the Federal Criminal Police Office (BKA). Additionally, recent on-chain data shows that long-term Bitcoin whales have sold $1.2 billion worth of BTC in the last two weeks, further impacting the market’s downward trend.
Analysis of Bitcoin’s Price Movement
- Scenario 1: Reclaiming the mid-range – Recent price action on Thursday saw a temporary push above $66,000, which was quickly retraced to $64,860, indicating a bearish retest on the daily chart.
- Scenario 2: Retesting the range low – There is a crucial support level around the range low of $60,500 that could influence Bitcoin’s future price direction. If Bitcoin bounces from this level, it may signal a move back towards the range high, potentially leading to a bullish trend continuation.
Should Bitcoin fail to regain the mid-range level and instead retest the range low, it could result in a prolonged period of sideways movement, extending the consolidation phase. Despite this, the overall higher time frame structure remains optimistic, maintaining a bullish outlook for Bitcoin’s price.
Hot Take: Key Considerations for Crypto Investors
As a crypto investor, it is crucial to stay informed about external factors that could impact the market, such as government actions and whale selling. Understanding these dynamics can help you make more informed decisions and navigate the volatility in the cryptocurrency space. Keep a close eye on market developments and adopt a proactive approach to managing your crypto investments to minimize risks and capitalize on opportunities.
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