Bitrabo Editorial
The Bitcoin price underwent fluctuations following the US and German governments’ operations involving confiscated Bitcoin (BTC) holdings, resulting in a BTC pullback.
According to Arkham, the US government transferred around 4,000 BTC seized from drug trafficker Banmeet Singh to Coinbase, while the German government conducted significant Bitcoin transactions, offloading about 2,786 BTC early on Wednesday.
Bitcoin Price Anticipates Potential Consequences
As previously disclosed by Bitrabo, Banmeet Singh, an Indian national, admitted to charges linked to drug trafficking and money laundering in January.
Singh’s illicit activities were associated with the sale and distribution of controlled substances through dark web platforms like Silk Road 1, Silk Road 2, Alpha Bay, and Hansa.
The wallets of the US government deposited 3,940 BTC, valued at $241.22 million at current rates, into Coinbase. Although moving to a centralized exchange (CEX) usually suggests selling, it is important to note that Coinbase also provides custodial solutions for large institutional investors.
This raises the possibility that the seized BTC may be shifted to Coinbase’s custodial services for safekeeping, which might not impact the Bitcoin price recovery.
In the event of the BTC sale, the recent influx of BTC to Coinbase and the anticipated Mt. Gox BTC movement in early July could influence the market.
Market analyst Adam Cochran implies that the relatively small BTC amount transferred and the usage of Coinbase suggest a gradual auction process, potentially mitigating adverse effects on the market and Bitcoin price.
German Government Participates in Asset Liquidation
Alongside the US actions, the German government continues its endeavor to divest substantial BTC holdings. Data from blockchain analytics firms, including Arkham Intel, indicates that the Federal Criminal Police Office (BKA) executed nine transactions involving roughly 2,786 BTC.
The Bitcoin price has already undergone a 20% decline over the past week, with BTC falling to $61,000 from a slight recovery earlier at $62,400.
Despite this, technical analyst Mags emphasizes the importance of the bull market support band in macro analysis. These bands have historically served as strong support and resistance during previous bull cycles.
Interestingly, BTC converted these bands into support in January 2023, and subsequent assessments have led to favorable upside momentum. This implies that despite market uncertainties arising from government sell-offs, ongoing technical analysis suggests potential continuity of the long-term bullish trend.
Currently priced at $61,000, Bitcoin remains down nearly 13% for the month.
Featured image from DALL-E, chart from TradingView.com