Is the German government putting an end to its selling spree?
The German government has recently transferred 1,000 Bitcoin (BTC) worth around $55.79 million to Coinbase, Bitstamp, and other addresses. According to Lookonchain, each exchange received 250 BTC, while an unidentified address starting with 139Po received 500 BTC.
This is not the first sale by the German government. In the past 19 days, they have moved a total of 11,032.3 BTC, valued at approximately $668.2 million. These transactions have caused significant volatility in the Bitcoin market.
Within the last week alone, major exchanges received 7,970 BTC, contributing to a market downturn. As a result, the price of Bitcoin briefly dropped below $55,000 before stabilizing between $55,000 and $56,000.
Despite these sales, the German government still holds 38,826 bitcoins, valued at around $2.17 billion. However, these ongoing transfers have created a bearish sentiment among traders, leading to speculation about the future direction of the market.
The CoinMarketCap Crypto Fear & Greed Index reflects this sentiment, with a score of 36 indicating fear in the market.
As of July 8, Bitcoin was trading near $57,120, with a 24-hour trading volume of $23.4 billion. The cryptocurrency saw a 2.31% decline over the past day, fluctuating between $56,045.50 and $54,415.94. Bitcoin’s market capitalization stood at $1.1 trillion, with open interest dropping by 2.29% to $15.8 billion.
It is likely that the German government’s selling of BTC has contributed to the volatility of the token.
Mags, an independent crypto analyst, pointed out that Bitcoin’s weekly candle closed below $60,000 for the first time in four months, signaling a 27% correction from its all-time high. The next significant support level is the upward-sloping trendline from $15,500, suggesting potential further downside.
The German government’s Bitcoin sales have faced criticism from various quarters. Joana Cotar, a member of the German Bundestag, opposed the sales and urged the government to use digital assets to diversify its treasury holdings instead. She argued that holding Bitcoin as a strategic reserve currency could strengthen Germany’s geopolitical position, similar to discussions in the United States.
Justin Sun, founder of Tron, even offered to purchase Bitcoin from the German government off-market to mitigate the negative impact on spot prices. Analysts, including Alex Krüger, believe that the continued selling pressure from these transfers will keep the market on edge.
Despite the cautionary outlook, Krüger remains optimistic about a positive market outlook toward the end of the year.