The German government isn't just selling its confiscated BTC to get a few extra billion dollars in the bank. For them it's pocket change.
This is a test. They want to assess the financial stability and security of Bitcoin by checking how much “real” demand there is. Hint: not so much!
Considering that BTC is down almost 25% since they first started, and almost 48% of orders are rejected due to insufficient buyers, it's safe to say that Bitcoin is failing the test.
But we already knew that this would happen. It is not news that this entire market is supported by fraudulent Chinese exchanges and stablecoins.