CoinTelegraph Report:
Author: Nancy Lubale, CoinTelegraph; Translation: Wu Zhu
A cryptocurrency wallet labeled “German Government (BKA)” has sold $900 million worth of Bitcoin, raising concerns about the selling pressure that may push down BTC prices.
According to on-chain data from Arkham Intelligence, on July 8th, a wallet associated with the German government transferred a total of about 16,309 bitcoins through multiple transactions to multiple external addresses.
This was the largest daily Bitcoin outflow from the wallet. Some of the recipients of these transfers include cryptocurrency exchanges Bitstamp, Coinbase, and Kraken, as well as market makers Flow Traders and Cumberland DRW.
In the largest transaction, 3,500 BTC was sent to Flow Traders, 200 BTC was sent to Kraken, 400 BTC was sent to Bitstamp, and 400 BTC was sent to Coinbase.
Additionally, 700 BTC, worth over $38.5 million, was sent to a wallet labeled “139Po.” The purpose of this wallet is currently unclear, but it has previously received funds from the German government, including 550 BTC on July 2nd, 500 BTC on June 25th, and 800 BTC on June 20th.
Following these transfers, the price of Bitcoin experienced a significant drop during the European trading session, falling from a high of $58,200 to a low of $54,278, representing a 6.75% decline, shortly after the final batch of blockchain transactions reduced the total to 8,700 BTC.
With the latest transfers, the German government’s selling frenzy has accounted for more than half of its holdings. According to Arkham’s data, its holdings have decreased from 50,000 BTC to 23,788 BTC, worth $1.3 billion, since the start of selling digital assets in June.
The drop in Bitcoin price has triggered a large-scale liquidation in the entire crypto market. According to data from Coinglass, a total of $425 million in leveraged positions was liquidated, with $216 million being long liquidations.
Within the past 24 hours, over $189 million worth of Bitcoin positions were liquidated, with $87 million being liquidated in the past 12 hours alone. Out of these, $81 million were long positions, while $107.97 million of short positions were liquidated.
Bitcoin seems to have found significant support at the $54,700 level. However, according to Coinglass data, breaking below this level would result in the liquidation of approximately $750 million worth of leveraged long positions across all exchanges.
The anticipated repayment process of the now-defunct cryptocurrency exchange Mt. Gox’s creditors is expected to bring more selling pressure on Bitcoin. The repayment plan involves using Bitcoin and Bitcoin Cash.
On July 5th, Nobuaki Kobayashi, the trustee for Mt. Gox’s bankruptcy estate, stated in a declaration that the company has begun repaying part of its debt to some creditors in the form of Bitcoin and Bitcoin Cash through several designated cryptocurrency exchanges.
The outstanding balance to be repaid amounts to $9 billion, including BTC and BCH, as well as other funds held by the trustee.
Cryptocurrency exchange Bitstamp plans to quickly repay its owed portion of Bitcoin to Mt. Gox’s creditors, although it has up to two months to complete this task after receiving the Bitcoin. This further exacerbates the selling pressure on Bitcoin.
According to blockchain analysis company Arkham Intelligence, a small amount of Bitcoin was previously moved out of wallets associated with Mt. Gox, with $2.71 billion being transferred out of the exchange’s cold wallets, allegedly in preparation for repayment.
Market participants still expect Bitcoin prices to rise again once the anticipated short-term selling pressure from Mt. Gox’s repayment and the German government’s selling subsides, leading to a continuation of the bull market.
