Is the German government unable to do anything to destroy the market? BTC may have reached a local bottom

Crypto markets stabilized on Monday after days of massive sell-offs.

In early trading that day, the German government address transferred more than 10,000 Bitcoins it held to crypto exchanges and market makers in several batches. The price of Bitcoin once fell below US$55,000. However, Arkham Intelligence data shows that US stocks During the closing period (corresponding to around 01:56 AM Beijing time on Tuesday), the German government address received 2,898 Bitcoins returned from exchanges, equivalent to approximately US$163 million, mainly from Coinbase, Kraken and Bitstamp.

Steven Zheng, director of research at The Block, analyzed that the exchange was likely to return the Bitcoin because it was unable to sell it within the target price range.

Steven Zheng said: “Considering that some Bitcoins have been returned from Coinbase to German government addresses, it can be assumed that they are unsold Bitcoins that are part of a sales agreement between the cryptocurrency exchange and the country.”

Bit Push Data shows that BTC hit about $55,200 early on Monday afternoon and then rebounded to $56,662.40 after the U.S. stock market closed, a 24-hour increase of 0.58%.

Altcoins are mixed, with the top 200 tokens by market capitalization seeing more declines than gains. Aelf (ELF) led the gains, rising 21.5% to trade at $0.421, with Celestia (TIA) and Curve DAO Token (CRV) gaining 14.5% and 10.1% respectively.

The current overall market value of cryptocurrency is US$2.07 trillion, and Bitcoin’s market share is 53.5%.

In terms of U.S. stocks, as of the close, the S&P 500 Index and the Nasdaq 500 Index rose 0.10% and 0.28% respectively, while the Dow Jones Index fell 0.08%.

Is the impact of the German government’s selling pressure exaggerated?

According to Arkham data, the German government’s sell-off progress is nearly halfway completed. Since the sell-off began last month, its BTC holdings have reduced from nearly 50,000 to 27,461, with current positions worth $1.5 billion.

Recent industry headlines have focused on events such as the German government sell-off and Mt.Gox refunds. Many analysts believe this is the main reason for the recent Bitcoin plunge, but Bitfinex analysts blame the decline. Normal seasonal weakness.

Bitfinex analysts said: “It is worth noting that the actual market value of Bitcoin that has flowed into the market since 2023 (that is, the value of Bitcoin being bought and sold) is as high as 224 billion U.S. dollars. In comparison, including the United States and Germany The amount of Bitcoin seized and subsequently sold by the government is only about 4% of the total real appreciation in the market since the beginning of 2023.” The analyst added: “Despite the huge nominal value, the actual transfer to exchanges. The number of Bitcoins in the U.S. is only in the hundreds of millions, indicating that the actual impact of government seizures of Bitcoin on the market and oversupply is relatively small. This suggests that while sales of seized assets are important in a single transaction, they have a significant impact on market dynamics and. The overall impact on Bitcoin price stability is not as big as it initially seemed. ”

Institutional investors view it as a buying opportunity

Despite the market decline, data released by CoinShares showed that the amount of inflows into digital asset investment products last week reached 10%. $441 million.

Among them, Bitcoin investment products accounted for the largest share of total crypto product inflows ($398 million) – 90%. From a regional perspective, inflows mainly came from the United States, with an inflow amount of US$384 million. Other higher buying orders came from Hong Kong, Switzerland, and Canada, with inflow amounts of US$32 million, US$24 million, and US$12 million respectively. Germany The outflow was US$23 million.

Analyst: BTC may have reached a local bottom

Bitfinex analysts said that BTC may have reached a potential local bottom.

Data provided by Bitfinex shows that the funding rate of the BTC perpetual contract has turned negative for the first time since hitting bottom on May 1.

Historically, periods of negative funding rates coupled with low short-term SOPR values ​​(a financial metric that measures the profit or loss realized by wallets of a specific group of investors on a given day) typically mark the bottom of a price correction .

Analysts said: “This may be seen as an increase in bearish sentiment, but also reinforces the view that BTC may be stabilizing or approaching a potential bottom as a balance of buying and selling pressure evolves. Negative indicators indicate heavy selling pressure Or sellers dominate the market, but it can also indicate that the market is oversold. When this oversold condition coincides with a recovery in SOPR, it usually indicates that the market is bottoming. ”

Secure Digital Markets analysts said in their report: “The RSI indicator shows that Bitcoin is oversold for the first time since August, just before the upward squeeze. For Bitcoin to gain further momentum, the price needs to break through 58,500 USD, a break above $60,500 marks a return to bullish territory.”

Tyr Capital Chief Investment Officer Ed Hindi believes that the current pullback is only temporary and insists that BTC prices will reach six figures by the end of the year. Ed Hindi said in a CNBC interview: “Bitcoin is currently in correction territory as miners and governments sell off Bitcoin stocks, but we believe long-term investors and speculators will continue to buy on dips. We see no reason to change Bitcoin’s end-2024 outlook $100,000 Goal ”

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