What to know:
- Unconfirmed reports that the Department of Justice has the green light to sell 69,370 BTC.
- This type of event has already happened last year when the German Government sold around 50,000 BTC.
- Long-term holders have sold around 1 million bitcoin since September to show how big the market is.
In simpler terms, if Bitcoin (BTC) falls from around $10,000 to $92,000 within a few days, it might suggest the end of its upward trend. However, it’s important to note that if Bitcoin remains below a significant psychological barrier at $100,000, it could continue to consolidate instead of resuming its bull run.
Preliminary information from DB News indicates that the Department of Justice (DOJ) might have been granted the power to sell off approximately 69,370 BTC (equivalent to around $6.5 billion) which were previously confiscated from the Silk Road online marketplace.
11 days before President-elect Donald Trump’s inauguration, a report states that he has no plans to sell the 187,236 Bitcoin currently held by the U.S. government. This information is based on data from Glassnode. Most of these tokens were obtained through seizures from Bitfinex and Silk Road.
There are several factors suggesting that the panic about a sell-off might be exaggerated: The news of 69,370 Bitcoin being liquidated appears substantial, but if they were indeed sold, it would likely happen gradually to secure the highest price possible. Notably, the market was already aware of this potential scenario, so it may have already factored this into its expectations.
In addition, it’s clear that around a million bitcoins have been taken up by the market since September. This trend is evident in the reduction of bitcoin holdings among long-term investors, as defined by Glassnode as those who have held bitcoin for more than 155 days. Currently, this group holds about 13.1 million BTC. Yet, during this same period, the price of bitcoin has skyrocketed from around $60,000 to over $100,000.
One explanation is that we have historical records showing another government selling a comparable quantity of bitcoin. Specifically, the German government disposed of about 50,000 BTC between mid-June and mid-July in 2023. At that time, the worth of the coins was roughly $3.5 billion; however, now it’s approximately half that amount.
Despite the German government holding approximately 25,000 Bitcoins, the market appeared to anticipate a sell-off and hit its lowest point around July 7 at roughly $55,000. This suggests that the amount of Bitcoin held by the German government did not significantly impact the market’s direction.
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2025-01-09 15:46