Here’s Why Bitcoin Price Suddenly Dropped Below $65,000
Bitcoin price fell below $65,000 today, coinciding with significant BTC movements by the German Federal Criminal Police Office (BKA).
According to arkham, BKA sent $425 million worth of Bitcoin to various wallets, including exchanges Kraken and bitstamp, raising questions about its potential impact on markets.
German Government’s Bitcoin Transfer
The German Federal Criminal Police Office (BKA) moved a large amount of Bitcoin on June 19. According to Arkham data, BKA transferred 6,500 BTC worth $425 million from its wallet.
Of this, $32 million was sent to kraken and $32 million was sent to Bitstamp. These transactions indicate that there may be an intention to sell some of the holdings.
Arkham CEO Miguel More claimed that the organization cashed $130 million worth of BTC into so-called utility wallets, a sign of an imminent sell-off. The transfer was first noticed by mantle blockchain strategist @Defi_Maestro on social platform X, suggesting that it could cause a stir in the market.
BKA’s seizure of BTC
BKA’s Bitcoin comes from the seizure of approximately 50,000 BTC from the owners of Movie2k.to, a movie streaming service launched in 2013. BKA received the money in mid-January 2024 after the suspects made a “voluntary contribution”. organization.
As of February, the wallet labeled German government contained this amount of Bitcoin until the last transfer.
According to Arkham, the wallet initiated several transactions on June 19; One of them was 6,500 BTC outflow, and the other was 2,500 BTC inflow to the wallet address. This move mobilized crypto enthusiasts and everyone began to wonder about the German government’s sales motives.
Bitcoin Market Reaction and Price Trend
Information regarding BKA’s Bitcoin transactions impacted market sentiment immediately following the announcement. Analysts noted an increase in the number of short positions and a slight decrease in the Bitcoin price after the transfers. As a result, Bitcoin’s price fell below $65,000, as it has in the past with large transactions by government agencies.
However, the actual number of BTC transferred to Kraken and Bitstamp was around 500 BTC each, and some analysts believe that this should not lead to a major change in the market. However, information that a government is liquidating assets can cause short-term market fluctuations.
Simultaneously, crypto analyst Ali Charts noted that Bitcoin fell below the +0.5σ MVRV pricing band to $67,890, indicating a correction towards the mid-price band of $54,930. When we compare the MVRV ratio to the 1-year SMA, we see that the momentum is indeed downward, meaning Bitcoin is trading at a loss compared to its previous purchase prices.
BTC Derivative Data
The German government’s latest actions also coincide with other market indicators that are sending mixed signals. Bitcoin’s dominance fell sharply by 0.93% to 54.31%, meaning investors are apparently in altcoins. There was also a small net outflow in the Bitcoin exchange balance; This is considered a bullish trend because traders prefer to hold Bitcoins rather than sell them.
The Crypto Fear and Greed Index is down 13.51% to 64, which is still in the ‘greed’ zone, meaning overall sentiment remains optimistic despite the recent pullback. However, the volume of open interest in Bitcoin futures and options is increasing, indicating more speculation and institutional investors.
Source: Coinglass
Funding rates, on the other hand, are slightly positive, which means investors are ready to keep long positions open even after prices rebound. This overall market behavior shows that although BKA’s transactions have led to bearishness in the short term, long-term market sentiment is still positive.
Also Read: Reasons Why Bitcoin Is Struggling Even As The Crypto Market Soars On Wednesday
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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