Bitcoin (BTC) investors are bracing for a clear time in the coming weeks after the German government moved the last tokens out of its wallets on Friday. While on the surface the outlook seems pessimistic, price action and onchain data reveal deeper insights into the new face of Bitcoin.
Is there more to Bitcoin's performance than meets the eye?
The German government appears to have sold off all 50,000 Bitcoins confiscated from pirated movie website Movie2k.to. According to analytics firm Arkham Intelligence, the government transferred the final tokens – 3846.05 BTC ($223.81 million) – to Flow Traders and 139Po (likely an institutional OTC/escrow service).
When the German government started transferring these tokens to several exchanges, including Coinbase, Kraken, Bitstamp, etc., last month, they were worth around $2.9 billion.
Despite the settlement by the German government, Bitcoin still faces a number of obstacles, including the BTC refund of Mt. Gox, miners sell to cover operating costs and pessimism surrounding historically poor third-quarter profits. Data from Kaito AI shows that the Bitcoin sentiment point is approaching zero and has reached its closest level when the BTC price was around $26,000.
Following rising pessimism, Bitcoin has decoupled from the broader US stock market over the past five weeks. While Bitcoin is down about 19.4% over the past week, the S&P 500 is up more than 5%, with several blue chip stocks hitting new highs.
Cryptocurrency analysis firm Santiment suggests that Bitcoin could experience a strong bull run despite lagging other assets. This view is based on the historical observation that large cryptocurrency price rallies often occur independently of traditional stock market performance. These price increases can sometimes occur without being significantly affected by the broader financial markets.
This view implies that Bitcoin's significant upside potential could be driven by factors unique to the mainstream cryptocurrency market that do not accurately reflect movements in stocks or traditional assets. other. Investors and analysts often use such information to understand the dynamics and potential moves in the cryptocurrency market.
This is in line with predictions from CryptoQuant, highlighting that Bitcoin is at a critical moment. Bitcoin hit a four-month low after hitting $53,000 last week. The move left both long- and short-term holders with losses of around $1 billion and traders facing an unrealized profit margin of -17% – a loss last seen at the time of FTX's collapse . These two factors show that the price is likely to bottom.
The sale also saw whales buying the dip as their holdings increased at a 6.3% month-on-month rate. Bitcoin ETFs also saw positive net inflows this week, indicating high buying pressure from investors.
While these factors should drive BTC growth in the coming weeks, CryptoQuant notes that the declining USDT market cap and miner sales suggest Bitcoin could “stabilize at a local bottom” or experience a through major corrections like the summer of 2021.
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