A cryptocurrency wallet linked to the German government, known as the BKA, has sold an additional $900 million worth of Bitcoin, leading to concerns that the increased selling pressure could cause a decline in BTC price.
On July 8, according to data from Arkham Intelligence, the wallet associated with the German government transferred a total of approximately 16,309 Bitcoin in multiple transactions to various external addresses. This was the largest single-day liquidation of Bitcoin by the wallet. Some of the transfers were made to crypto exchanges such as Bitstamp, Coinbase, and Kraken, as well as to market makers Flow Traders and Cumberland DRW.
In one notable transaction, 3,500 BTC was sent to Flow Traders, while 200 BTC went to Kraken, 400 BTC to Bitstamp, and 400 BTC to Coinbase.
Another 700 BTC, equivalent to over $38.5 million, was sent to a wallet known as “139Po,” which remains unidentified but has previously received funds from the German government. This included 550 BTC on July 2, 500 BTC on June 25, and 800 BTC on June 20.
Following these transfers, the price of Bitcoin experienced a sharp drop during the European trading session, falling as much as 6.75% from a high of $58,200 to a low of $54,278. This occurred shortly after the last group of blockchain transactions, bringing the total amount of Bitcoin transferred to 8,700 BTC.
With these latest transfers, the German government has sold more than half of its Bitcoin holdings. According to Arkham data, its holdings have been reduced from 50,000 BTC to 23,788 BTC, worth $1.3 billion, since it began selling the digital asset in June.
This drop in Bitcoin price triggered significant liquidations across the crypto market. Coinglass data shows that a total of $425 million worth of leveraged positions have been liquidated, with $216 million of that being long liquidations.
In the past 24 hours alone, over $189 million in Bitcoin positions have been liquidated, with $87 million of that occurring in the last 12 hours. Of these liquidations, $81 million were long BTC positions, while $107.97 million were short BTC positions.
Bitcoin has found support at the $54,700 mark, but if it falls below this level, approximately $750 million worth of leveraged long positions across all exchanges could be liquidated, according to Coinglass data.
In addition to the German government selling, there is also selling pressure from the Mt. Gox repayments. The process of repaying creditors of the now-defunct exchange has begun, with repayments in Bitcoin and Bitcoin Cash scheduled. The trustee for the Mt. Gox bankruptcy estate has started repaying some creditors through designated crypto exchanges. The total balance to be repaid is $9 billion worth of BTC and BCH, along with additional funds held by the trustee.
Bitstamp, a crypto exchange, plans to quickly distribute its portion of the Bitcoin repayments to Mt. Gox creditors, despite having up to two months to do so. This follows the movement of a small amount of Bitcoin out of wallets associated with Mt. Gox, signaling preparations for the repayments.
Market participants are still optimistic that Bitcoin prices will rise again once the selling pressure from the Mt. Gox repayments and German government selling subsides.
At the time of publication, Bitcoin was trading at $56,433, representing a 1.52% decrease over the past 24 hours.
Please note that this article does not provide investment advice or recommendations. It is important for individuals to conduct their own research and make informed decisions when investing or trading.