Bitcoin has continued to decline by over 6% in the past week, pushing the asset below $60,000 temporarily. Despite a slight recovery since then, its rebound seems to have stalled around $61,500, causing concerns among investors about further losses. This is particularly due to the US government transferring 3,940 BTC to Coinbase Prime after obtaining liquidation approval.
However, QCP Capital believes that Bitcoin will be able to defend the support level of $60,000. On June 26, the US government transferred 3,940 BTC to Coinbase Prime’s institutional trading division. These tokens were originally seized earlier this year from a convicted drug dealer named Basmet Singh.
This transfer has raised concerns that the government may sell part of its BTC reserves, which could put downward pressure on the asset’s price, which is already in a precarious position.
According to the latest analysis shared by QCP Capital, despite facing significant bearish pressure, Bitcoin is effectively holding above the support level of $60,000. There are two main reasons why it will be able to defend this level.
Firstly, a wallet identified as belonging to the German government has slowed down the pace of transfers to exchanges, only sending 250 BTC yesterday. This may indicate that their current selling regime has ended.
Additionally, Bitcoin ETF has seen a net outflow of $52.4 million in the past two days after seven consecutive days of fund outflows. Taking these factors into consideration, QCP Capital believes in its latest analysis that the market timing for Bitcoin accumulation has matured.
Such an explanation may also suggest that the asset is now in a preparatory phase.
Is Bitcoin ready?
The latest research by CryptoQuant also suggests signs of a local bottom forming for this leading asset. The on-chain intelligence platform highlights that the open interest in the futures market has decreased by $3 billion due to long liquidations. The funding rate for perpetual contracts is also close to zero, indicating a “balance” in the market and a price structure that is “healthier and less overly optimistic”.
Furthermore, Bitcoin dropping below $60,000 this week has attracted several buyers. In fact, holders controlling 0.1% of the total Bitcoin supply added 7,130 BTC to their repositories in just one day. The newly purchased BTC is worth approximately $436 million. Interestingly, this particular accumulation also marks the highest net inflow since late May, which may indicate investor confidence in a price rise from here.