Bitcoin, the leading cryptocurrency by market cap, has pulled back from its six-week high, dipping below the $67,000 mark on Tuesday morning. The drop in Bitcoin comes after news on Monday, July 29, that the United States government moved $2 billion worth of seized Bitcoin, raising investor concerns about the potential sale of these assets. This movement came just two days after presidential hopeful Donald Trump announced his intention to start accumulating BTC, which pushed Bitcoin to the $70,000 mark yesterday for the first time since mid-May.
Data from Arkham Intelligence indicates that the government moved 29.8k BTC worth $2.02 billion out of its total holdings of 183,439 BTC to an unknown address, generating a fresh wave of fear in the markets. As news spread, tweets suggesting the U.S. government’s intention to sell these Bitcoins caused panic, leading Bitcoin’s price to drop to $66,500. At the time of writing, Bitcoin was trading at around $66,800, down about 4% over the last 24 hours.
Technical Analysis on the 4-Hour Chart: BTC faces bearish correction below $67k
The four-hour chart for Bitcoin shows a downward trend after it fell in price recently. At present, the Relative Strength Index (RSI) is at 41.93 indicating neutral or slightly bearish sentiment below level fifty thereby implying that if market conditions remain poor there may be further room for downward movement.
The Moving Average Convergence Divergence (MACD) indicator shows a bearish crossover, with the MACD line (blue) crossing below the signal line (orange). Additionally, the MACD histogram is printing red bars, confirming the bearish momentum.
Support is currently established at around the $66,500 level, where Bitcoin has found some stability. However, if this support fails to hold, the next significant support level could be around $65,000. On the upside, resistance is noted near $68,000, which Bitcoin needs to break above to regain its bullish momentum.
Bitcoin to Fall lower?: Market downturn Follows amid US Govt and Institutional Sell-offs
However, Bitcoin’s stability is now under threat as the US government recently took action and large institutional investors have sold off significant amounts of BTC leading to heightened market volatility. Concerns are being raised by a recent transfer made by the US government that involved $2 billion worth of bitcoins recovered from Silk Road since it may flood the market with more of this cryptocurrency. On top of this, FalconX, a prominent digital asset prime brokerage, transferred 1k BTC amounting to $69.52m into Binance immediately after this move occurred.
The market’s reaction was swift, with Bitcoin’s price momentarily surging past the $70,000 mark before retreating to stabilize around $68,000. These movements coincide with a reported decline in the Coinbase Premium Index, which fell below its 14-day Simple Moving Average, signaling a slight increase in selling pressure across the board. This sell pressure highlights the market’s sensitive reaction to both real and speculated actions by major players.
Adding to the market’s concerns, economist and gold advocate Peter Schiff suggested that the Biden administration might opt to sell all seized Bitcoins to prevent Donald Trump, should he return to office, from using them to establish a U.S. “strategic” reserve. Schiff’s comments have fueled further speculation and uncertainty within the market, affecting investor sentiment.
The Coinglass data shows large sums sent into Bitcoin Spot ETFs amounts which are worth $122.10 million, this means that in spite of the ongoing market turbulence certain sections of it have been experiencing huge money injections. Nevertheless, there is a sense of trepidation among traders since the 11 US spot Bitcoin ETFs with a combined Bitcoin holding amounting to $52.77 billion account for a substantial portion of the market and can cause significant price swings given new inflows or outflows.
