German Government’s Bitcoin Moves Intensify Market Pressure

• Bitcoin drops to an 8-week low of $58,402 amid a downward trend.
• German Government sells 3,500 BTC and liquidates an additional 900 BTC on exchanges.
• German authorities confiscated 49,857 BTC from the pirated movie site Movie2k operator.

Bitcoin has been experiencing a strong downward trend since the middle of June. As this week commenced, it plunged to a low not seen in 8 weeks, reaching $58,402. The decline in its value can be attributed to multiple factors, including the announcement from the now-defunct cryptocurrency exchange Mt. Gox regarding the commencement of asset distribution in the first week of July to its clients affected by the 2014 hack after numerous delays.

Additionally, the German Government’s recent actions have been a focal point. Over the last week, they have sold a total of 3,500 BTC (valued at approximately $225 million) to various centralized cryptocurrency exchanges (CEXs) at an average price of $64,364, which has garnered considerable attention.

Data from SpotOnChain indicates that 18 hours prior, the German Government liquidated an extra 900 BTC (worth around $54.76 million), with 400 BTC ($24.34 million) being transferred to both Coinbase and Kraken. Their remaining Bitcoin holdings now stand at 46,359 BTC, valued at $2.88 billion. This activity aligns with a 6% decrease in Bitcoin’s value over the preceding week.

It is also important to note that the German Government executed another transfer of 2,000 BTC just yesterday. Out of this, 1,100 BTC ($72.4 million) was sent to various CEXs, with 500 BTC ($32.6 million) each going to Kraken and Bitstamp, 40 BTC ($2.61 million) each going to Gemini and BitFlyer, and 30 BTC ($1.96 million) each going to Coinbase.

Furthermore, on January 16, 2024, the German Government confiscated 49,857 BTC (valued at $2.14 billion at the time) from an individual operating the pirated movie website Movie2k.

Implications for Bitcoin’s Market?

The Relative Strength Index (RSI) on the daily chart is currently at 33, suggesting a strong bearish sentiment. The selling pressure is exacerbated by the recent transactions made by the German Government. However, market analysts have identified a buying opportunity, as the TD Sequential indicator on the Bitcoin daily chart is signaling a potential short-term recovery, with an anticipation of a bounce back over the next one to four days.

Maintaining forward progress is essential for Bitcoin enthusiasts. The upcoming major target is the $63,144 level, followed by $65,135 if the positive trajectory persists. On the other hand, the value could fall to $58,514 if the pessimists exacerbate the situation.