On Friday (July 5), Bitcoin rebounded slightly after falling below $57,000 in the short term, but bears are still firmly in control. The German government once again sold 1,300 bitcoins, triggering severe panic in the market, causing Bitcoin to fall below the 200-day moving average, a technical indicator used by traders to identify long-term trends.
According to Arkham data monitoring, the whale wallet address marked as "German Government" transferred a total of 1,300 bitcoins, equivalent to approximately US$75.53 million, to Bitstamp, Coinbase and Kraken.
The sell-off caused the bitcoin price to fall below the key 200-day simple moving average (SMA), a key technical indicator often used by traders to assess long-term trends.
Justin Sun, founder of TRON, tweeted: “I am willing to negotiate with the German government to purchase all Bitcoin off-market to minimize the impact on the market.”
QCP Capital noted that it was another day of heavy selling pressure, causing Bitcoin to fall below the $60,000 support level and reach a low of $57,875.
The report also highlights signs of miner capitulation, a phenomenon that has historically been associated with price bottoms, such as the sharp drop in hash rate when Bitcoin traded at $17,000 in 2022.
Despite the ongoing sell-off, the options market remains optimistic, especially for Ether.
QCP Capital added: “The options market remains bullish as we continue to see a heavy bias in interest towards Ethereum call options for September and December expirations.”
Additionally, the market is preparing for the impact of the upcoming Mt. Gox repayment to its creditors.
The Mt. Gox rehabilitation trustee plans to distribute billions of dollars worth of Bitcoin and Bitcoin Cash (BCH) to creditors between July 1 and October 31, 2024, according to Peter Chung, head of research at Presto.
The market expects this influx to significantly alter supply and demand dynamics.
“Our analysis suggests that selling pressure on Bitcoin Cash will be 4 times greater than Bitcoin,” Chung explained, suggesting a potential trading opportunity for those looking to ride market volatility.
The German government "takes action again" to sell Bitcoin in panic, and the price of Bitcoin fell to 57,000
The German government has transferred around 1,300 bitcoins to major crypto exchanges, causing a sharp drop in the value of bitcoin and sending a ripple effect through the wider cryptocurrency market.
According to Arkham Intelligence data, German authorities transferred about $75 million worth of Bitcoin to exchanges such as Bitstamp, Coinbase, and Kraken. The transfer is one of the largest Bitcoin transfers made by the German government to centralized exchanges in the past few weeks.
The sell-off caused the bitcoin price to fall below the key 200-day simple moving average (SMA), a key technical indicator often used by traders to assess long-term trends.
Even after this massive transfer, the German government’s Bitcoin portfolio remains sizable. Currently, the German government holds a massive Bitcoin portfolio worth $2.3 billion. However, recent market movements have caused the value of its portfolio to drop significantly, down $136.17 million in the past 24 hours, but the sell-off is not limited to Bitcoin.
QCP Capital reports that the entire cryptocurrency market is facing huge selling pressure, with Bitcoin falling below the $60,000 support level.
The US Independence Day is closed and the market consensus is "weak non-farm payrolls"
With U.S. traders taking the day off to celebrate Independence Day, markets will need to digest data due on Wednesday.
The ADP report on private sector payrolls came in below expectations, with payrolls increasing by 150,000 in June compared to forecasts for an increase of 160,000.
In addition, initial jobless claims for the week were 238,000, higher than the expected 235,000.
The U.S. services sector shrank in June, with the ISM services PMI index falling to 48.8 from 53.8 in May, a record low and well below market expectations of 52.5.
Minutes of the Fed’s June 11-12 meeting showed officials did acknowledge that the U.S. economy was slowing and price pressures were easing, but they stopped short of making any promises of rate cuts, preferring a cautious, data-dependent approach.
Investors will now turn their attention to the important June nonfarm payrolls report due on Friday. The Bloomberg consensus forecast is for 190,000 jobs, down from 272,000 in May.
Bitcoin Technical Analysis
CMTrade said that Bitcoin RSI is below 30, which could mean that the price is in a continued downtrend, or simply oversold and therefore bound to retrace, in which case look for bullish divergence.
The MACD is below its signal line and negative, which is configured to be negative.
Moreover, the price is below its 20 and 50-period moving averages at $57,976 and $59,168 respectively.
“Our pivot is at $57,610 and our preference is that as long as $57,610 is resistance, the downside will prevail.”
“The alternative is above $57,610, looking for $58,420 and $58,900.”
In 24 hours, about $333.1 million in leveraged cryptocurrency long positions were liquidated, while short positions stood at $50.52 million.
Meanwhile, the total market capitalization has fallen by 4.23% in the past 24 hours and is currently at $2.13 trillion. The total trading volume has increased by 42%, proving the strong selling power in the cryptocurrency market.
