Since June 19th of this year, the German government has been continuously transferring a large amount of Bitcoin to exchanges for cashing out. The recent transfer of 1,400 BTC may lead to heavy selling pressure in the market. Rachel Lin, the Asia-Pacific Business Manager of Deribit, pointed out that if the selling pressure continues, Bitcoin may quickly drop to $50,000.
The German government’s related wallets have been conducting multiple large-scale Bitcoin transfers since June 19th, frequently transferring to various cryptocurrency exchanges such as Coinbase, Kraken, and Bitstamp, suspected to be for selling and cashing out. This is considered one of the main reasons for the continuous weakening of Bitcoin.
Originally, Bitcoin rebounded over the weekend, giving investors a brief respite. However, Bitcoin began to drop again this morning, and Arkham data shows that the German government address also transferred 1,400 BTC to the address 139…bVu over the weekend, worth about $80 million. Analyst Yujin pointed out that the 139…bVu address is likely a fund management institution that, after receiving the coins, will distribute them to centralized exchanges such as Coinbase, Kraken, and Bitstamp for sale.
The German government has already transferred approximately 13,000 BTC (worth $819 million) within a month, according to Lookonchain monitoring. It currently still holds 39,826 BTC (worth $2.29 billion). There were previous reports that the German government repurchased some Bitcoin over the weekend, but this was later confirmed to be false. Bitcoin News pointed out that the German government address receives some Bitcoin because its sell orders were not completely executed, resulting in the unsold Bitcoin being returned to the account.
Regarding the continuous selling, German Federal Parliament member Joana Cotar has strongly criticized the government’s decision to sell Bitcoin, believing that it will have a long-term negative impact on the stability of the cryptocurrency market. Tron founder Justin Sun even boldly announced that he is willing to purchase all the Bitcoin held by the German government through over-the-counter (OTC) trading in order to minimize the impact of these Bitcoins flowing into the market.
Rachel Lin, the Asia-Pacific Business Manager of Deribit, commented on the situation, stating that the main catalyst for this decline is the sale of confiscated Bitcoins by the German and US governments, as well as the start of repayments by the bankrupt Japanese exchange Mt. Gox, which triggered a preemptive selling in the market. Lin also mentioned that the selling pressure is unlikely to ease in the short term, as the German government still holds approximately $2.2 billion worth of Bitcoin, the US government holds over $12 billion, and Mt. Gox still holds over $8 billion in assets. The future trend of Bitcoin in the next few days will depend on the selling pressure from Mt. Gox users.
Lin Chen, the Asia-Pacific Business Manager of Deribit, analyzed that last week, in addition to a small net outflow on Tuesday and Wednesday, and a rest day for Independence Day on Thursday, the BTC spot ETF had net inflows on other days, with a total net inflow of $237.8 million. Although market sentiment remained low last week, Bitcoin rebounded from $54,000 to $57,000 at one point.
Rachel Lin mentioned that this week’s focus will be on the opening of the US stock market on Monday. If there is another rally, it is possible that this Bitcoin bottoming out phase will end.
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