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US Gov’t Bitcoin Sale ‘Doesn’t Affect Anything’ as Bears Drive Market Down

US government Bitcoin sales add to market pressure, but analysts argue these sales are insignificant. Bears, however, ensure the market feels the impact.

• Main Points:

  • Bitcoin Drop: BTC falls to multiday lows as US government sells 10,000 BTC.

  • Bears React: Market players “sell the news,” driving further declines.

  • Historical Impact: Similar government sales in 2024 triggered 5% BTC drops.

  • State Losses: Germany’s BTC sale led to $124 million in missed profits.

  • Analyst View: Large players dictate market reaction, not the sales themselves.

• Detailed Insights:

  • Bitcoin Drop: Bitcoin dropped to $57,816 on August 15, following the US government’s largest BTC transfer of the year—10,000 BTC ($581 million) sent to Coinbase, increasing selling pressure.

  • Bears React: Analysts note that bears used the news of the US government’s BTC sale to drive down the market, triggering a familiar risk-off reaction.

  • Historical Impact: Previous US government transfers in 2024 led to similar outcomes, with BTC prices dropping around 5% within three days of the transactions.

  • State Losses: Germany also sold off its BTC holdings, missing out on $124 million in potential profits as BTC prices rose shortly after the sales.

  • Analyst View: Despite the sharp market reaction, analysts like Axel Adler argue that the actual sales by governments have little impact, with market sentiment and actions of large players playing a bigger role.

Related: 45% of Bitcoin Supply Hasn't Moved in 6 Months, Research Shows

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Bitcoin, Ethereum Dip as Market Digests CPI Numbers

Bitcoin and Ethereum prices drop following the CPI report, reflecting a broader risk-off sentiment in the crypto market.

• Main Points:

  • Market Dip: Bitcoin falls 4%, Ethereum 3.8% after CPI report.

  • CPI Impact: Inflation data meets expectations but dampens market enthusiasm.

  • US Government BTC Transfer: Nearly $600M in seized BTC transferred to Coinbase.

  • ETF Outflows: U.S. Bitcoin spot ETFs see $81.4M in outflows.

  • Market Outlook: Analysts predict continued volatility, with potential support and resistance levels identified.

• Detailed Insights:

  • Market Dip: Bitcoin dropped by 4% to $58,500, and Ethereum fell by 3.8% to $2,630 on Thursday, following the release of the U.S. Consumer Price Index (CPI) report. The overall crypto market capitalization declined by 4.4% to $2.1 trillion.

  • CPI Impact: The CPI report showed a 0.2% monthly rise in prices, aligning with expectations and bringing the annual inflation rate to 2.9%. While this was seen as a stable result, it cooled initial market enthusiasm.

  • US Government BTC Transfer: The U.S. government transferred nearly $600 million in seized Bitcoin from the Silk Road case to Coinbase, sparking concerns about potential sell-offs and contributing to Bitcoin's price drop.

  • ETF Outflows: U.S. Bitcoin spot ETFs recorded a net outflow of $81.4 million on August 14, with Grayscale Bitcoin Trust (GBTC) seeing significant outflows. Conversely, U.S. spot Ethereum ETFs saw a modest net inflow of $10.8 million.

  • Market Outlook: Despite the downturn, analysts point to key support levels for Bitcoin at $58,800, $57,000, and $59,000, with resistance near $60,250. A potential 50 basis point rate cut by the Federal Reserve in September could trigger a crypto market rebound.

Related: FBI Responds to Inquiry About Bitcoin Creator Satoshi Nakamoto

Bitcoin Price Struggles Around $59,000 as US Government Transfer Weighs

Bitcoin faces pressure as a large US government BTC transfer to Coinbase coincides with declining daily active addresses and ETF outflows.

• Main Points:

  • US Government Transfer: 10,000 BTC worth $593.5M moved to Coinbase.

  • Price Decline: Bitcoin drops 1.16%, trading at $58,105.

  • ETF Outflows: Bitcoin Spot ETFs see an $81.4M outflow on Wednesday.

  • Decreased Activity: Daily active BTC addresses fell 6.5% in three days.

  • Technical Analysis: BTC faces resistance at $62,066; potential further declines.

• Detailed Insights:

  • US Government Transfer: Arkham Intelligence revealed that a wallet linked to the US government transferred 10,000 BTC ($593.5 million) to Coinbase Prime on Wednesday. This move, related to Silk Road confiscated funds, has sparked fears of a potential price drop among traders, as similar government-related transfers have previously led to 5% BTC price declines.

  • Price Decline: Bitcoin price struggles, dropping by 1.16% to $58,105 on Thursday, following the news of the government transfer and broader market concerns.

  • ETF Outflows: Bitcoin Spot ETFs recorded a mild outflow of $81.4 million on Wednesday, breaking a two-day streak of inflows. Despite the outflow, total Bitcoin reserves in US spot ETFs remain substantial at $55.15 billion.

  • Decreased Activity: On-chain data from Santiment indicates that daily active Bitcoin addresses have declined by 6.5% since Tuesday, continuing a downward trend that has persisted since mid-March, suggesting a decrease in blockchain demand.

  • Technical Analysis: Bitcoin faces strong resistance at the 61.8% Fibonacci retracement level of $62,066. If BTC continues to decline, it may test support at $49,917. Indicators like the RSI and Awesome Oscillator suggest a bearish trend unless BTC can break above $62,066, which could lead to a 6% price increase.

Related: US Treasury’s $1 Trillion Injection Could Push Bitcoin to $100,000

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This article is not financial advice. Market conditions can change rapidly, and past performance does not guarantee future results