German gov’t transfers another $900M in Bitcoin, adding to BTC’s selling pressure
2024.07.08 17:47
A “German Government (BKA)” labeled cryptocurrency wallet has sold another $900 million worth of Bitcoin, sparking fears that the related selling pressure will push BTC price lower.
According to onchain data from Arkham Intelligence, the wallet associated with the German government transferred a total of roughly 16,309 Bitcoin (BTC) in multiple transactions to various external addresses on July 8. This marks its largest single-day Bitcoin liquidation. Some of the transfers were to crypto exchanges Bitstamp, Coinbase, and Kraken and market makers Flow Traders and Cumberland DRW.
In one of the largest transactions, 3,500 BTC was sent to Flow Traders, 200 BTC to Kraken, 400 BTC to Bitstamp and 400 BTC to Coinbase.
BKA BTC transfers. Source: Arkham Intelligence
Another 700 BTC, worth over $38.5 million, was sent to the wallet “139Po,” which remains unknown 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, Bitcoin price dropped sharply during the European trading session, falling as much as 6.75% from a high of $58,200 to as low as $54,278, shortly after the last group of blockchain transactions bringing the total to 8,700 BTC.
With the latest transfers, the German government is more than halfway through its selling spree. According to Arkham data, its holdings have been reduced to 23,788 BTC, worth $1.3 billion, from 50,000 BTC since it started offloading the digital asset in June.
This drop in Bitcoin price triggered massive liquidations across the crypto market. According to data from Coinglass, a total of $425 million leveraged positions have been liquidated across the crypto market — $216 million of which were long liquidations.
More than $189 million in Bitcoin positions have been liquidated over the last 24 hours, $87 million of which have been liquidated over the last 12 hours alone. Of these, $81 million were long BTC positions, against $107.97 million short BTC liquidations.
Total crypto liquidations. Source: Coinglass
Bitcoin appears to have amassed significant support at the $54,700 mark. However, a move below it would liquidate approximately $750 million worth of cumulative leveraged long positions across all exchanges, according to Coinglass data.
Bitcoin exchange liquidation map. Source: Coinglass
Related: Bitcoin weakness spurs $441M digital asset inflows
Mt. Gox repayments could introduce more Bitcoin selling pressure
The long-awaited repayment process for the creditors of the defunct crypto exchange Mt. Gox has begun, with repayments in Bitcoin and Bitcoin Cash (BCH) scheduled.
On July 5, Nobuaki Kobayashi, the trustee for the Mt. Gox bankruptcy estate, said in a statement that it had begun repaying some of the creditors in Bitcoin and Bitcoin Cash through several designated crypto exchanges.
The balance to be repaid stands at a significant $9 billion worth of BTC and BCH, as well as additional funds held by the trustee.
Adding to the Bitcoin selling pressure is news that crypto exchange Bitstamp aims to swiftly distribute its portion of Bitcoin repayments to Mt. Gox creditors, even though it has up to two months to do so once it receives the coins.
This comes after a small amount of Bitcoin was moved out of wallets associated with Mt. Gox, according to blockchain analytics firm Arkham Intelligence, with $2.71 billion being transferred from the exchange’s cold wallet, supposedly in readiness for the repayments.
Source: Arkham
Market participants still expect Bitcoin prices to climb again, continuing the bull market once the expected near-term selling pressure from the Mt. Gox repayments and German government selling cools off.
At the time of publication, Bitcoin was trading at $56,433, down 1.52% over the last 24 hours.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
