The German state of Saxony continues to deplete its Bitcoin reserves, transferring 10,567 BTC (about $600 million) to various entities, including Bitstamp, Coinbase, Kraken, Flow Traders, and Cumberland DRW. This follows the government's seizure and subsequent auctioning of Bitcoin from Movie2K, a film piracy website, earlier this year. The wallets linked to German authorities now hold only 6,894 BTC ($394 million), down from nearly 50,000 BTC three weeks ago.

Germany's Bitcoin sell-off has sparked concerns among crypto investors about its potential impact on the market. Many attribute the recent downturn in asset prices to fears of oversupply. However, Greg Cipolaro, head of research at digital asset manager NYDIG, suggests that fears about looming sell pressure might have been exaggerated.

Despite the bearish events pushing the Crypto Fear & Greed Index into the “Extreme Fear” zone, the market remains optimistic. Bitcoin is currently trading at $57,281, down 6% over the last week and 15% over the last month. The German government's sell-off is expected to conclude by Friday or early next week.