Bitcoin (BTC) recently plunged to a one-month low of $64,000, causing concern among bullish investors who now fear impending selling pressure and a potential retest of lower support levels.
Adding to these concerns, it has come to light that a wallet belonging to the German police has moved $425 million worth of BTC to cryptocurrency exchanges, according to on-chain data firms. This development has sparked speculation about the agency’s intentions and potential market impact.
Selling Pressure Concerns
On Wednesday, crypto data analytics firm Arkham detected a significant cryptocurrency wallet named “German Government (BKS),” transferring 6,500 BTC, equivalent to $425 million.
The wallet, which had held over 50,000 BTC since the end of January 2024, moved the funds to a new address. Some of the transferred BTC was sent to popular exchanges Kraken and Bitstamp.
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The recent movement of BTC by the German government agency follows a significant seizure of 50,000 BTC in January. At the time, it was regarded as the largest cryptocurrency seizure ever conducted in Germany.
The bulk of the BTCs were seized by German police, with the suspects voluntarily transferring them to official wallets provided by the German Federal Criminal Police Office (BKA). Currently, the government wallet contains 43,350 BTC with a total value of over $2.8 billion.
Crypto analyst Daan Crypto Trades suggested that transferring BTC from the German government’s wallet to exchanges may have contributed to the emergence of short positions and a slight dip in Bitcoin’s price during Wednesday’s trading session. This move raises concerns about potential selling pressure in the market and its impact on Bitcoin’s price trajectory.
Bitcoin Faces Downtrend Signal
Regarding price action analysis of the largest cryptocurrency on the market, BTC is at a crucial juncture as analysts offer contrasting perspectives.
Technical analyst Ali Martinez suggests a potential continuation of the downtrend as Bitcoin’s recent breach of the +0.5σ market value to realized value (MVRV) price band at $67,890 indicates the potential for a correction toward the mid-price band at $54,930.
Martinez points out that when the MVRV is below the 1-year simple moving average (SMA), it often signals a downtrend. This analysis suggests BTC may experience further downward price pressure due to the heavy distribution near the top.
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In contrast to Martinez’s bearish outlook, another analyst who goes by the pseudonym “Titan of Crypto” remains bullish on the Bitcoin bull market.
The analyst points to the Parabolic SAR indicator and the LMACD (Logarithmic MACD) on the 2-month chart, indicating that the bull market is still intact. According to the analyst, these indicators suggest that BTC’s bullish momentum remains intact.
However, the future direction of Bitcoin’s price remains uncertain, with investors cautiously navigating the evolving market conditions.
At the time of writing, BTC was trading at $64,850, down over 7% in the last seven days alone, demonstrating the bearish sentiment surrounding the Bitcoin market.
Featured image from DALL-E, chart from TradingView.com