Since June 19th of this year, the German government has been continuously transferring a large amount of Bitcoin to exchanges for cashing out. Just this past weekend, they transferred another 1,400 BTC, which may lead to significant 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 making multiple large Bitcoin transfers since June 19th, frequently transferring to various cryptocurrency exchanges such as Coinbase, Kraken, and Bitstamp, presumably for selling and cashing out. This is believed to be one of the main reasons for the continuous weakening of Bitcoin.
Initially, Bitcoin rebounded over the weekend, giving investors some relief. However, Bitcoin started to decline again this morning, and Arkham data shows that the German government address also transferred 1,400 BTC to address 139…bVu over the weekend, with a value of approximately $80 million. Analyst Yu Jin pointed out that the address 139…bVu is likely associated with a fund management institution, which will distribute the coins to centralized exchanges such as Coinbase, Kraken, and Bitstamp for selling.
The German government has already transferred approximately 13,000 BTC within a month. According to Lookonchain, since June 19th, the German government address has transferred a total of 13,466 BTC ($819 million), and currently holds 39,826 BTC ($2.29 billion).
Previously, there were reports that the German government repurchased some Bitcoin over the weekend, but this was later proven to be false. Bitcoin News stated that the German government receives some Bitcoin in their address because their sell orders were not completely filled, resulting in the unsold Bitcoin being returned to their account.
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 to minimize the impact of these coins entering the market.
Rachel Lin, the Asia-Pacific Business Manager of Deribit, stated that the main catalyst for this decline is the sale of confiscated Bitcoin by the German and US governments, as well as the start of repayments by the bankrupt Japanese exchange Mt. Gox, which triggered a preemptive sell-off in the market. Rachel Lin mentioned that it is unlikely that the selling pressure will 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 assets worth over $8 billion. The future trend of Bitcoin in the next few days will depend on the sell-off by Mt. Gox users.
Deribit’s Asia-Pacific Business Manager Lin Chen analyzed that last week, except for a small net outflow on Tuesday and Wednesday, and the independence day holiday on Thursday, the BTC spot ETF had a net inflow on the other days. The total net inflow for the week reached $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 the focus this week will be on the opening of the US stock market. If there is another rally, it may indicate the end of this Bitcoin bottoming out phase.
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