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Bitcoin Price Dips As Germany Moves 16,000 BTC To Exchanges

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  • Germany moves 16,000 BTC to exchanges, causing a market stir with the Bitcoin price dipping to $55,000.
  • The BTC trading volume spikes 94.66% despite the government’s massive sell-off.
  • Miner confidence rebounds as hashrate stabilizes at 691.8 Eh/s amidst price volatility.

On Monday, the German government moved more than 16,000 Bitcoins to different exchanges and market makers. This incident led to significant swings in the cryptocurrency market.

As reported by blockchain analytics platform Arkham, those first few transfers consisted of 133.723 BTC to market maker Cumberland DRW, then 5200 BTC to Flow Traders, 4200 BTC to the B2C2 Group, 2350 BTC to Bitstamp, 2050 BTC to Coinbase and 1250 BTC to Kraken. These transactions are a part of the ongoing German government’s move to sell all its Bitcoins.

Earlier on Monday, the government also sent 250 BTC to Bitstamp and Coinbase and 500 BTC to an unlabeled address, which is most likely an OTC service or another exchange.

Bitcoin Market Reactions and Price Fluctuations

The Bitcoin price fluctuated in reaction to these transfers. At first, the BTC value fell to a low of $55,000. However, the price slightly recovered to $56,400, which is a 1.2% decline from the previous 24 hours. 

Bitcoin price
BTC/USD 24-hour price chart (source: CoinMarketCap)

However, this price slump was accompanied by a 94.66% rise in trading volume in the same timeframe, showing strong demand for BTC even when it is under selling pressure.

The market’s response is due to the increased supply of Bitcoin, which entered the market during this summer trading period with low activity. The German government’s selling spree and the ongoing repayments by the bankrupt crypto exchange Mt. Gox have only amplified the supply-side pressure on the market, affecting the Bitcoin price.

Government’s Holdings and Strategy Criticisms

The German government is still in possession of over 23,788 Bitcoins, which are worth approximately $13 billion. That’s comparatively lower than the 50,000 Bitcoins the government had at the beginning of the selling process. 

This sequence of actions has led to concerns over the government’s approach and timing, particularly with some parliament members suggesting that BTC should be viewed as a strategic reserve currency.

Bitcoin price
German Government Balance (Source: Arkham)

Joana Cotar, the German Bundestag member and an active Bitcoin supporter, has spoken out against the government’s approach. According to her, selling BTC without a proper plan is unwise since it fails to tap into the potential of Bitcoin as a strategic asset. Cotar also expressed concerns about the effects of such big liquidations on the market.

Experts believe this is likely to continue as more of the virtual currency is moved onto the market from these large holders. However, the high trading volume indicates that the selling pressure has not deterred investors from engaging in Bitcoin trading. This interest may help the market normalize in the long term, especially if the trading volume keeps increasing and accommodates the new supply.

Bitcoin Miners’ Activity Amid Price Corrections

The recent Bitcoin price fluctuations have significantly affected the mining industry. In the last week alone, the price of Bitcoin has dropped below $57,000 by more than 10%. It has had a direct impact on the profitability of miners, as profitability has greatly decreased.

Bitcoin price

Although the profitability was lower, the hashrate of Bitcoin did not fall significantly and even increased on July 7 to 691.8 Eh/s. This stability indicates that more miners are joining the network, thus enhancing the network computing power. However, surprisingly, the mining difficulty of Bitcoin dipped to 79.50T on July 5, opposite to the conventional pattern, where increased hashrate raises the mining difficulty.

Concurrently, according to Glassnode data, Bitcoin miners’ net position change was negative in the last week, which suggests that selling pressure was quite high. However, the miners’ balances increased significantly on July 8, showing that miners have regained confidence in the possibility of a Bitcoin price rise.

Disclaimer

The contents of this page are intended for general informational purposes and do not constitute financial, investment, or any other form of advice. Investing in or trading crypto assets carries the risk of financial loss. The forecasted data (also called “price prediction”) on this page are subject to change without notice and are not guaranteed to be accurate.

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Andrew Smith
Andrew Smith
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
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