On Friday (January 10), Bitcoin plummeted to around $92,400, hitting a low of $91,208 overnight. Fox Business contributor Jason Williams claimed that the Biden administration instructed the DOJ to sell over 1,000 Bitcoins during the bull market at a sale price of $94,000.

CoinTelegraph noted that the U.S. Department of Justice (DOJ) is preparing to auction $6.5 billion worth of Bitcoin, a decision made following a court ruling on December 30 that ended a long-standing legal dispute over the ownership of this Bitcoin.

According to on-chain tracking firm Arkham Intelligence, as of January 9, the U.S. government holds 198,000 Bitcoins, worth about $18.5 billion, with the aforementioned $6.5 billion sale coming from the same reserve.

Some analysts speculate that the outgoing Biden administration may decide to sell all government-held Bitcoins for political reasons before Donald Trump is inaugurated as the elected president of the United States.

Williams claimed that the Biden administration instructed the DOJ to sell thousands of Bitcoins during the bull market, fully aware that the incoming Trump administration might buy back these Bitcoins at a higher price.

He stated, "This is a blatant distortion of the government's fiduciary responsibility."

He added, "The Biden administration sold Bitcoin at around $94,000; what would Trump have to pay to buy them back? More."

After the ruling allowing the U.S. government to sell 69,370 Bitcoins was announced, the price of Bitcoin plummeted.

However, history shows that U.S. government Bitcoin auctions have little lasting impact on Bitcoin prices. For example, from March 2023 to now, the U.S. government's Bitcoin holdings have decreased from 236,000 Bitcoins to 198,000, a reduction of about 38,000 Bitcoins, valued at approximately $3.54 billion at current prices.

Despite the sell-off, Bitcoin's price surged 375% during the same period, driven by strong demand for the newly launched Bitcoin spot ETF and growing optimism around Trump's campaign promise to include Bitcoin in U.S. strategic reserves.

Glassnode co-founders Jan Happel and Yann Allemann explained how the U.S. government handles Bitcoin sales. They noted that once Bitcoin is seized, the Department of Justice hands it over to the U.S. Marshals Service, which manages sales through public auctions. These auctions are transparent and do not involve directly selling Bitcoin on cryptocurrency exchanges.

Direct sales on exchanges could lead to market oversupply, causing prices to drop significantly, whereas auctions can minimize this risk.

The U.S. government has previously lost considerable profits through Bitcoin sales; over the years, it has seized and sold approximately 195,092 Bitcoins, generating about $366.5 million from these auctions. However, at current prices, the sold Bitcoins are estimated to have a cumulative value of $1.825 billion.

This means the government lost nearly $17.9 billion in potential revenue, highlighting the enormous opportunity cost of prematurely liquidating held assets. Ki Young Ju, founder and CEO of on-chain data platform CryptoQuant, stated, "Based on the actual market value, $379 billion entered the market last year, about $1 billion a day. The $6.5 billion sold by the U.S. government could have been absorbed in just a week. Don't panic."

Bitcoin Technical Analysis

The price of Bitcoin has fallen below $95,195 and has remained stable below that level to maintain the bearish trend scenario suggested for future trading days, waiting to reach $90,000, followed by the 38.2% Fibonacci retracement level of $87,055 as the next major target.

The stochastic indicator has lost positive momentum, reinforcing the expectation of a decline for the remaining time of the day; breaking above $95,195 and holding that level would prevent current negative pressure and push prices to attempt to restore the main bullish trend.

The current expected trading range is between a support level of $91,000 and a resistance level of $95,500.

The trend forecast is bearish.