A cryptocurrency wallet associated with the German Government (BKA) has recently sold $900 million worth of Bitcoin, leading to concerns that this selling activity will cause the price of BTC to decrease.
On July 8, the wallet linked to the German government transferred approximately 16,309 Bitcoin in multiple transactions to various external addresses, according to data from Arkham Intelligence. This marked the largest single-day liquidation of Bitcoin for the wallet. Some of the transfers were made to popular crypto exchanges such as Bitstamp, Coinbase, and Kraken, as well as market makers Flow Traders and Cumberland DRW.
In one of the largest transactions, 3,500 BTC was sent to Flow Traders, while 200 BTC went to Kraken, and 400 BTC each to Bitstamp and Coinbase.
Additionally, another 700 BTC, valued at over $38.5 million, was sent to a wallet named “139Po.” This wallet is still unidentified but has previously received funds from the German government, including 550 BTC on July 2, 500 BTC on June 25, and 800 BTC on June 20.
Following these transfers, the price of Bitcoin experienced a sharp decline during the European trading session, dropping as much as 6.75% from its high of $58,200 to a low of $54,278. This drop occurred shortly after the last group of blockchain transactions, which brought the total amount of Bitcoin transferred to 8,700 BTC.
With these recent transfers, the German government has sold more than half of its Bitcoin holdings. According to Arkham data, its holdings have been reduced from 50,000 BTC to 23,788 BTC, which is worth $1.3 billion, since it began selling the digital asset in June.
This significant drop in the price of Bitcoin triggered a wave of liquidations across the crypto market. Coinglass data shows that a total of $425 million worth of leveraged positions were liquidated, with $216 million of that coming from long liquidations.
In the past 24 hours, over $189 million in Bitcoin positions were liquidated, with $87 million of that occurring in the last 12 hours alone. Of these liquidations, $81 million were long BTC positions, while $107.97 million were short BTC positions.
Bitcoin seems to have found strong support at the $54,700 level. However, if the price drops below this level, it could lead to approximately $750 million worth of cumulative leveraged long positions being liquidated across all exchanges, according to Coinglass data.
In addition to the selling pressure caused by the German government, Bitcoin prices may also be affected by the ongoing Mt. Gox repayment process. The trustee for the Mt. Gox bankruptcy estate has started repaying some of the creditors in Bitcoin and Bitcoin Cash through designated crypto exchanges. The total amount to be repaid is a significant $9 billion worth of BTC and BCH, along with other funds held by the trustee.
Furthermore, Bitstamp plans to distribute its portion of Bitcoin repayments to Mt. Gox creditors quickly, even though it has up to two months to do so. This news, combined with the movement of a small amount of Bitcoin from Mt. Gox wallets, has added to the selling pressure on Bitcoin.
Despite these factors, market participants still anticipate that Bitcoin prices will rise again once the selling pressure from the Mt. Gox repayments and the German government subsides. At the time of writing, Bitcoin is trading at $56,433, representing a 1.52% decrease over the past 24 hours.
Please note that this article does not provide investment advice or recommendations. It is important for readers to conduct their own research and analysis before making any investment decisions.