Bitcoin traders are being urged to stay calm and avoid impulsive decisions in response to recent government sell-offs of the cryptocurrency. This level-headed advice comes from Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant, who emphasizes the minimal impact of such activity compared to the overall market.
In a recent post on July 5th, Ki Young Ju argues that the amount of Bitcoin being sold by governments globally pales in comparison to the continuous flow of new capital entering the cryptocurrency market. He highlights that since the start of the current bull market, the total inflow of funds surpasses $250 billion. In contrast, the estimated total amount of Bitcoin potentially up for sale by governments stands at a significantly lower figure – less than $10 billion.
Govt #Bitcoin selling is overestimated.$224B has flowed into this market since 2023. Government-seized BTC contributes about $9B to the realized cap.It's only 4% of the total cumulative realized value since 2023. Don't let govt selling FUD ruin your trades. pic.twitter.com/12fy2sKsXH
— Ki Young Ju (@ki_young_ju) July 5, 2024
Summarizing his perspective, Ki states: “Govt Bitcoin selling is overestimated. $224B has flowed into this market since 2023. Government-seized BTC contributes about $9B to the realized cap.”
Ki Young Ju’s viewpoint offers a welcome dose of reason amidst the recent volatility in Bitcoin’s price. The market has witnessed significant spot selling, fueled by a combination of ongoing government sell-offs and transfers from wallets linked to the defunct Mt. Gox exchange.
Germany and the United States are the two central players in these government sell-offs. According to data from crypto intelligence firm Arkham, Germany still holds approximately 41,200 BTC seized from various illicit activities over the years.
The Crypto Fear and Greed Index, a market sentiment indicator, currently reflects a reading close to “extreme fear.” However, Ki Young Ju believes that such panic based solely on government actions is unwarranted. He clarifies, “It’s only 4% of the total cumulative realized value since 2023.”
As Cointelegraph continues to provide market updates, analysts remain vigilant as Bitcoin approaches crucial long-term support levels following the breaching of several trendlines.
The “supertrend floor” at $52,000 is one of the most immediate support levels. Some technical analysis suggests the possibility of a further drop to $45,000, which would bring the current correction more in line with historical patterns.
Meanwhile, “classic” bull market support levels currently sit considerably higher than the current spot price. These include the 200-day moving average and the short-term holder cost basis for Bitcoin, at $58,550 and $64,175 respectively.
Bitcoin’s price reached a four-month low of $53,500 on July 5th. At the time of writing (a day later), the price has recovered somewhat, hovering around $3,000 higher according to data from Cointelegraph Markets Pro and TradingView.
