Breaking: US Government Transfers $2B in Seized Silk Road BTC - What Does This Mean for Bitcoin's Price?
The cryptocurrency world is buzzing with speculation following the recent move by the US government involving seized Bitcoin (BTC) associated with the notorious Silk Road dark web marketplace. This development arrives at a critical juncture for Bitcoin's price, which has been struggling to sustain its position above the $70,000 mark after reaching its latest all-time high of $73,700 on March 14.
As the leading cryptocurrency undergoes another round of price correction, the transfer of these seized funds has ignited intense speculation regarding a potential sell-off by the US government.
Seized Silk Road BTC On The Move
According to on-chain data, a wallet linked to the US government has recently transferred 30,175 Bitcoin seized from the Silk Road dark web marketplace. This transfer follows the earlier seizure of over 50,000 Bitcoin from James Zhong, who illegally obtained the cryptocurrency from the Silk Road in 2012. The US Department of Justice's (DOJ) confiscation of these funds marked the largest cryptocurrency seizure in its history.
This isn't the first instance of the US government moving Bitcoin obtained from criminal cases. In March 2022, the government sold 9,800 Bitcoin, with plans to sell an additional 41,500 BTC. However, the recent transfer of the 30,175 BTC from Silk Road-related addresses has raised questions about the fate of these funds and their potential impact on the ongoing Bitcoin price correction.
Benjamin Skew, an on-chain data expert, provided insights into the situation. While there is chaos surrounding the Silk Road Bitcoin being sent to Coinbase for sale, a closer examination reveals that the main funds were transferred to a newly created wallet that remains inactive. However, Skew noted that 2,000 BTC of the total amount were transferred to the alleged Coinbase wallet for undisclosed purposes, while the remainder was sent to a newly created wallet.
200EMA Support Crucial For Bitcoin's Price
Currently, the Bitcoin price is witnessing a lack of bullish momentum as the cryptocurrency struggles to consolidate above the critical $70,000 threshold. Nonetheless, hope persists on the horizon.
Crypto analyst Ali Martinez emphasizes the significance of the 200-epimetric moving average (EMA) on the 4-hour chart of BTC. Martinez asserts that this indicator has served as formidable support since early February and continues to play a crucial role in preventing further downward movement.
The focus on the 200EMA arises from its potential to either catalyze a rebound or trigger more losses for Bitcoin. If the 200EMA maintains its status as strong support, it indicates a significant likelihood of a price rebound, offering renewed bullish momentum and potentially propelling Bitcoin's price above the $70,000 mark.
However, a break below the 200EMA, as observed in mid-January, could expose the Bitcoin price to further downward pressure and potential losses.
Bitcoin (BTC) is currently trading at $65,390, continuing its recent price correction. Over the past 24 hours, BTC has experienced a 5% decline, while over the past seven days, it has seen a significant drop of over 6%.
Market observers closely monitor whether the current key support level can withstand further price drops or if a potential bounce will occur before reaching that point. The outcome of these scenarios remains uncertain.