Market Boost Following German Asset Recovery
The cryptocurrency market experienced a surge in sentiment on Tuesday as a German government entity successfully recovered over $200 million worth of Bitcoin from various exchanges. During the Asian morning hours, Bitcoin was trading just above $57,300, reflecting a 3.5% increase over the past 24 hours.
Other major tokens also saw gains, with Solana’s SOL surging by as much as 6% and Ether (ETH) climbing back above $3,000. Dogecoin (DOGE) also saw a rise of nearly 7%.
Market Recovery Amid Initial Concerns
The market had been unsettled on Monday when Bitcoin briefly dropped to as low as $55,000 after an address linked to the German Federal Criminal Police Office (BKA) sent over $900 million to various addresses. This sudden movement spooked traders. However, it was later revealed that the BKA had received over $200 million back from exchanges such as Kraken, Coinbase, and Bitstamp within the past 12 hours.
According to data from Arkham, while the assets were sent to these exchanges, they did not hit the market, providing reassurance to investors.
German Government’s Bitcoin Holdings
The German government had previously confiscated a significant Bitcoin stockpile worth approximately $3 billion from the movie piracy website Movie2k.to. In January, German police seized 50,000 BTC from the site, marking the largest Bitcoin confiscation by law enforcement authorities in Germany to date.
Starting in mid-June, the government began gradually liquidating over 10,000 BTC, which exerted downward pressure on the cryptocurrency’s market rate. Last week, German lawmaker and Bitcoin advocate Joana Cotar urged the government to halt its “hasty” Bitcoin selling spree and consider adopting Bitcoin as a “strategic reserve currency” to protect against risks in the traditional financial system.
Cotar emphasized that Bitcoin could help Germany diversify its treasury assets, safeguard against inflation and currency devaluation, and foster innovation within the country. She argued that further sell-offs would be counterproductive and not in Germany’s best interests. Cotar pointed out that other governments, including the United States, are considering or already holding Bitcoin as a reserve currency. She also extended an invitation to four German politicians to attend the “Bitcoin Strategies for Nation States” event scheduled for October 2024.
Selling Pressure and Market Dynamics
In a recent note, Matteo Greco, a research analyst at Fineqia International, highlighted the impact of Mt. Gox and miners’ selling pressure on Bitcoin’s price decline. He noted that Bitcoin closed the week at around $55,850, representing an 11% decrease from the previous week’s closing price. Throughout the week, strong selling pressure was evident, with BTC briefly trading as low as $53,500 before rebounding.
The start of Mt. Gox repayments and ongoing selling pressure from miners, following the recent halving, contributed to the high on-chain selling pressure, according to Greco. As reported, Bitcoin miners are facing a critical phase known as “capitulation” as their profits diminish amidst the recent sell-off in the Bitcoin market. Miner capitulation occurs when miners reduce their operations or sell a portion of their mined Bitcoin and reserves to sustain their operations, earn yield, or hedge their Bitcoin exposure.
Powered by Crypto Expert BD
Follow us on Twitter: https://x.com/CryptoExpert_BD
Join our Telegram channel: https://t.me/CryptoExpert_BD
