German government has transferred approximately 1,300 bitcoins to major cryptocurrency exchanges, resulting in a significant drop in the value of bitcoin and a ripple effect in the wider cryptocurrency market.
According to data from Arkham Intelligence, the German authorities transferred around $75 million worth of bitcoin to exchanges including Bitstamp, Coinbase, and Kraken at around 10 am Central European Time today.
This transfer marks one of the largest-scale bitcoin transfers by the German government to central exchanges in recent weeks.
The sell-off has caused the price of bitcoin to fall below the key 200-day simple moving average (SMA), a critical technical indicator that traders often use to assess long-term trends.
Bitcoin dropped to a low of $56,952 during the early European trading hours and is currently trading at $57,650, down 4.5% for the day.
Despite this significant transfer, the German government’s bitcoin portfolio remains substantial. Currently, it holds an important bitcoin investment portfolio valued at $2.3 billion, including 4.0359 million bitcoins.
However, recent market actions have led to a significant decline in the value of its portfolio, down $136.17 million in the past 24 hours. But the sell-off is not limited to bitcoin.
QCP Capital reports that the entire cryptocurrency market is facing immense selling pressure, with bitcoin breaking below the support level of $60,000.
QCP Capital points out, “Another day of heavy selling pressure leads to BTC breaking below the 60k support, and a low of 57,875.”
The report also highlights signs of miner capitulation, a phenomenon historically associated with price bottoms, such as when bitcoin traded at $17,000 in 2022 and saw a significant drop in hash rate.
Despite the ongoing sell-off, the options market remains optimistic, especially for Ethereum.
QCP Capital adds, “The options market remains optimistic as we continue to see a severe skew in interest for bullish ETH options expiring in September and December.”
Furthermore, the market is preparing for the impact of the upcoming Mt.Gox repayment.
Peter Chung, Head of Presto Research, states that the Mt.Gox rehabilitation trustee plans to distribute billions of dollars worth of BTC and BCH to creditors between July 1 and October 31, 2024.
This inflow is expected to significantly alter the supply/demand dynamics.
Chung explains, “Our analysis suggests that the sell pressure on BCH will be four times that of BTC.” This indicates a potential trading opportunity for those looking to navigate market volatility.
Edited by Stacey Elliott.