The German government has been aggressively liquidating its sizable Bitcoin holdings over the last month, completely exhausting its cryptocurrency reserves.
Arkham Intelligence recently revealed that the government’s wallet—famously identified as the “German Government”—now displays a balance of 0 Bitcoin, signaling the conclusion of this aggressive sell-off strategy.
Swift Sale of Bitcoin Holdings
The completion of these transactions represents a turning point in the dynamics of the Bitcoin market and may relieve some of the selling pressure that has been holding down the price of the cryptocurrency.
Just three weeks ago, the German government started a swift sale of its Bitcoin holdings, reducing them from 46,000 units at first to just 3,856 cryptocurrencies.
Germany’s Bitcoin holdings. Source: Arkham Intelligence
Significant volumes of Bitcoin were moved to a number of locations, including private wallets and cryptocurrency exchanges, in order to facilitate this quick depletion of reserves.
800 BTC was recently transferred to the Kraken exchange, 500 BTC was transferred to a wallet with the name “bc1q,” and 1,000 BTC was transferred to a wallet with the single identification “139p.”
In the most recent transaction from the government’s wallet, 3,846 Bitcoin—worth around $223.81 million—went to 139Po and Flow Traders.
Cryptocurrency Market Rebound
The cryptocurrency market is starting to rebound as this protracted period of Bitcoin sales draws to an end. Due to the constant selling, the price of Bitcoin had been steadily declining below $60,000. In the past day, however, it has increased by 0.91% to $58,236.12.
The market may be about to undergo a rebound phase, with the possibility of a parabolic climb in Bitcoin’s value, given that this revival follows a period of notable bearish volatility.
But even after the German government’s attempt to liquidate Bitcoin was successful, the cryptocurrency still faces significant obstacles.
For example, the United States possesses a sizeable reserve of Bitcoin that might be transferred to centralized exchanges such as Coinbase, so exerting more pressure on the market. Furthermore, according to Coingape reports, the Chinese government may decide to liquidate up to 190,000 BTC at any time.
The upcoming payout to Mt.Gox beneficiaries is another significant issue. Given its possible influence on the market, BTC traders are advised to keep a careful eye on this development.
Technical Assessments and Market Sentiment
A glimmer of hope can be found in technical assessments notwithstanding these concerns. Analysts have detected indications that Bitcoin may be approaching a local price bottom using the Wyckoff method.
This might indicate the beginning of a rebound that could push the cryptocurrency above the psychological $60,000 barrier.
#Bitcoin and the Wyckoff-Reaccumulation Model.Shared this chart exactly one week ago.Do you see the similarities now? I hope you were listening fam.I think we will see $BTC back above $60,000 very soon. pic.twitter.com/AHKgtOuxAY
— 𝕄𝕠𝕦𝕤𝕥𝕒𝕔ⓗ𝕖 (@el_crypto_prof) July 11, 2024
Prominent cryptocurrency expert Moustache recently stated in a social media post that he believes Bitcoin will soon surpass $60,000, which lends credence to this optimistic view.
Furthermore, there is a strong demand for BTC in the US compared to other countries, according to the Coinbase Premium indicator, which tracks price discrepancies between Bitcoin transactions on Coinbase—a platform mostly utilized by US investors—and those on Binance.
Nevertheless, Bitcoin’s price has to stay above $56,750 in order to continue its current trend. In order to stop any possible bearish momentum and build a solid foundation for future price advances, this level is essential.
The market is anticipating a more steady and rising price environment as it adjusts to the German government’s decision to stop selling Bitcoin.
The end of this specific chapter of Bitcoin liquidation by the German government could help the coin to recover its ground and maybe start an ongoing increasing trend in its value.
The wider consequences for the stability of the Bitcoin market and investor sentiment remain unknown as analysts and investors see these events unfold.
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