Bitcoin (BTC) Attempts to Retest the Support Level of Around $56.5K, the German Government Has Been on a Bitcoin-Selling Spree

The cryptocurrency market has been trapped in a bloodbath in the past three days led by Bitcoin (BTC), which is attempting to retest the support level of around $56

Bitcoin (CRYPTO: BTC) price encountered another round of selling pressure on Thursday as it approached a crucial support level. The total crypto market cap slipped around 5 percent in the last 24 hours to hover about $2.25 trillion during the early New York session.

As a result, around $300 million was liquidated from the leveraged crypto trading space, with the majority involving long traders.

German Government On A Selling Spree

According to on-chain data analysis provided by Arkham Intelligence, the German government has been selling a lot of Bitcoin since June 18. Notably, the German government has sent nearly 10k Bitcoins to different exchanges in the past few weeks.

On Thursday, the German government sent around 3k Bitcoins, valued at roughly $175 million, to different crypto exchanges. As of this report, the German government holds about 40.35k Bitcoins, valued at around $2.34 billion, thus qualifying as a whale holder.

More Selling Pressure

Bitcoin price has faced immense selling pressure from whale traders attempting to take profits. With more than 16 percent of Bitcoin holders in losses, the selling pressure could continue amid low bullish pessimism.

Moreover, the $9 billion Mt.Gox’s Bitcoin distribution that is set to take place beginning this month has increased midterm bearish sentiment.

What Next?

As Bitcoin price approaches the crucial support level around $56,500, most analysts believe a general market rebound could occur. However, if Bitcoin price consistently closes below $56.5k, further crypto capitulation will be inevitable in the coming weeks.

In such a scenario, Bitcoin price could drop towards the next major support range between $40k and $50k.

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