The German government recently emptied its Bitcoin wallet, selling the last 3,846 BTC. This marks the conclusion of a 23-day process during which nearly 50,000 BTC, seized after shutting down the piracy platform Movie2k, was liquidated. The sales have significantly impacted Bitcoin’s market dynamics, with prices initially dropping from around $63,000 to $54,000. The end of these sales might remove some downward pressure, potentially paving the way for a recovery.
Key Takeaways
- The German government sold its last 3,846 BTC in a 23-day liquidation process.
- Bitcoin is close to key resistance levels, rebounding to $58,000 after a recent drop.
- Bitcoin has bounced back as the German government no longer has BTC to sell.
- On July 12, spot Bitcoin ETFs gained $310 million, led by BlackRock and Fidelity.
- Bitcoin is above $58,000 on Saturday, holding onto its gains from earlier in the week.
Final Bitcoin Sell-off By German Govt
The German government’s Bitcoin wallet has decreased to 3,856 BTC just 3 weeks after commencing sales. This additional selling pressure, amounting to $222 million, has driven BTC’s price below $60,000 over the past week.
However, indicators of a potential price bottom are beginning to appear. On July 12, the latest transactions from this wallet included transfers of 800 BTC to Kraken, 500 BTC to wallet “bc1q,” and another 1,000 BTC to wallet “=139p.”
The government began selling Bitcoin in mid-June, having held nearly 50,000 BTC since February 2024. These assets are believed to have been confiscated from the operators of the pirate movie website Movie2k.
The police-operated wallets have been moving these funds to various exchanges, such as Coinbase, Bitstamp, Kraken, and Cumberland, as well as to Flow Traders and an unidentified address.
According to Coinbase Institutional, the German government’s Bundeskriminalamt (BKA) started selling the seized Bitcoin in mid-June, the government transferred 6,500 BTC, worth over $425 million, to various exchanges and addresses, creating supply overhangs that have destabilized the market.
Notably, these German Bitcoin transfers have coincided with significant inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) over the recent four trading sessions, during which U.S. spot Bitcoin ETFs have absorbed approximately $801 million in BTC.
Additionally, a report from CryptoQuant highlights aggressive purchasing by whales, who are capitalizing on the lower prices, acquiring BTC at the fastest rate since April 2023.
Impact on Bitcoin Market
The large-scale liquidation contributed to Bitcoin’s recent price volatility, with BTC dropping from around $63,000 to a low of $54,000 before rebounding to $58,000. Analysts have been closely watching this event, speculating on its implications for Bitcoin’s future price movements.
According to Arkham Intelligence, the German government’s sell-off has eased some of the selling pressure on Bitcoin, potentially allowing for a more sustainable upward trajectory.
On July 12, spot Bitcoin ETFs saw a significant inflow of $310 million, driven primarily by major financial institutions BlackRock and Fidelity. This substantial investment underscores the growing institutional interest and confidence in the cryptocurrency market, highlighting the increasing acceptance of Bitcoin as a mainstream asset.
However, BTC must overcome several key resistance levels to confirm a bullish trend. Rekt Capital, a prominent crypto trader, emphasized that Bitcoin needs to close above $58,350 and secure a weekly close above $60,600 to maintain its upward momentum.
Industry Reactions and Thoughts
With the German government’s Bitcoin wallet now empty, analysts and traders are watching closely to see if Bitcoin can maintain its upward momentum. Some traders believe that closing above $58,350 could signal the end of the downtrend and open the path to $60,600. This sentiment is echoed by prominent traders on social media, who emphasize the importance of key resistance levels.
The sell-off has also dropped Germany’s position in global government Bitcoin holdings. Initially one of the top holders, Germany now ranks fifth after offloading a significant portion of its reserves.
Some of the crypto influencers have also commented on X platform (Formerly Twitter) about this scenario.
“This phenomenon is the most bullish for BTC holders.”
– @Wise Advice
“German govt’s decision was not appropriate as the future of finance lies within Bitcoin”
– @JCSmith
Renowned crypto trader Alex Krüger and other experts believe that the market has the capacity to absorb such sell-offs, drawing comparisons to past liquidations, such as those from the Mt. Gox exchange.
Someone Sent $1.87 BTC To The German Govt Empty Wallet
After the German government sold off all their Bitcoin, they received an unexpected surprise. Someone sent them $1.87 worth of Bitcoin and included a message inscribed in the transaction: “HFSP German government“.
➡ ️ HFSP stands for “Have Fun Staying Poor.” This phrase is often used humorously in the cryptocurrency community to suggest that those who sell their Bitcoin might regret it later when the value increases.
In this case, the sender of the $1.87 Bitcoin was poking fun at the German government for selling their Bitcoin, implying that they might miss out on future gains. The message, combined with the emoji, adds a playful and mocking tone to the gesture.
Is This The Bitcoin Bottom?
The critical question remains: Is this the bottom for Bitcoin? While the German government’s complete liquidation has added to the selling pressure, market sentiment suggests a complex interplay of factors. According to Coinglass data, significant support exists at the $61,500 mark, and any move below this could trigger further liquidations of leveraged positions.
The recent decline in cryptocurrency prices has been primarily attributed to the German government’s selling activity, which is connected to the settlement of Mt. Gox’s creditors. Over the past two weeks, Bitcoin’s price dropped from around $63,000 to approximately $54,000. Despite a recovery to the $58,000 range, Bitcoin still needs to overcome several key price levels.
With a portion of the supply overhang now removed, Bitcoin may have the potential to maintain its upward momentum. According to the trader known as Rekt Capital, Bitcoin first needs to close the day above $58,350 and subsequently achieve a weekly close above $60,600 to sustain this momentum.
The trader also noted that Bitcoin is nearing a critical challenge against the downtrend line that has been suppressing its price for the past six weeks. This marks the third attempt in three days and the fourth attempt this month. The previous three attempts were met with strong rejections.
Upcoming Market Movements – Next Step for BTC Investors
Bitcoin has the potential to extend its gains by nearly 9%, the ability of reaching a key resistance level at $63,631. This aligns with the 50% Fibonacci retracement level of Bitcoin’s decline from its March 14 high of $73,777 to the July 5 low of $53,485, as illustrated in the BTC/USDT daily chart below.
Bitcoin encounters resistance at the upper boundary of the Fair Value Gap (FVG) at $59,400 and $63,288. It appears that Bitcoin may have found a bottom on July 5, and the asset could continue to gain.
The Moving Average Convergence Divergence (MACD) indicator is showing green histogram bars above the neutral line, indicating positive underlying momentum for Bitcoin.
Bitcoin may find support at $56,771, which is the upper boundary of the Fair Value Gap (FVG) below the current price. In the event of a significant correction, the July 5 low of $53,485 could serve as additional support for BTC.
Resolution
The German government’s liquidation of its Bitcoin holdings may indeed mark a noteworthy event for Bitcoin’s price action. With the removal of a substantial supply overhang, the path could be clearer for Bitcoin to reclaim higher price levels. However, traders and investors should remain vigilant, as the market continues to navigate through these turbulent times.
This development adds another layer to the ever-evolving narrative of Bitcoin and its place in the global financial landscape. As always, staying informed through reliable sources and continuous analysis will be key to making well-informed decisions in the crypto market.
Author : Mr.OxBull
Article Published : July 14th, 2024