Here’s Why Bitcoin Is Down Today, Dropping Another 5%

One of the reasons behind today’s drop in Bitcoin, which led to a 5% crash, is a series of sell-offs by the US government, the German government and other whales.

Bitcoin (BTC) is currently going through one of the most bearish periods this year, having fallen nearly 21% from its June 7 peak of $72,144. BTC has been in a four-week long downtrend, with multiple support levels broken.

Bitcoin Takes Another 5% Drop Today

The leading cryptocurrency showed commendable resilience against this decline on June 25 after retesting $58,000. This led to a 6-day consolidation period. The consolidation ended with a rally from June 29 to July 1. With July expected to restore the bullish momentum, investor sentiment has seen a favorable shift.

However, despite this shift, some market observers have warned of a resumption of hostilities. Dr. Martin Hiesboeck, Head of Research at Uphold, is one such commentator. As The Crypto Basic reported yesterdayHiesboeck informed the investing public of a double top in Bitcoin on the weekly chart. This is a pattern that signals sustained declines.

Interestingly, this predicted downtrend has now materialized, with Bitcoin down another 5% today. The cryptocurrency has now given way to the $59,000 and $58,000 price levels in bearish action, currently trading at $57,426. This new decline is the product of multiple sell-offs by several whales.

Reason for BTC Drop: Whale Selling

On-chain analytics platform Spot On Chain (SOC) has highlighted four of these large sell-off events. In their report, they identified the movement of 3,500 BTC ($206 million) to Binance. The whale involved, while unknown, is likely depositing them in an attempt to sell off. The address still holds 4,368 BTC at a loss.

In addition to this whale, another unidentified address sent 1,023 Bitcoin worth $62.2 million to Binance today. This notably added to the selling pressure, leading to investor angst and reinforcing the current downtrend.

Furthermore, the German government has also attracted attention. The Criminal Investigation Bureau, BKA, recently moved 3,000 BTC, sending 1,300 of these tokens to exchanges for sale. These tokens are part of the 50,000 BTC seized by the government in 2013 from the defunct piracy platform Movie2k. The BKA still holds 40,359 BTC.

Additionally, the US government has today transferred 237 Bitcoin worth $13.67 million to a new wallet. Some entities create such new wallets with the intention of getting rid of their assets. SOC confirmed that the US government still has a balance of 213K BTC seized in multiple enforcement actions.

Mt. Gox Prepares for Refund

In addition to the sell-off campaign highlighted by SOC, blockchain journalist Colin Wu highlighted the actions of the bankrupt Mt Gox exchange today.

In particular, the exchange has run several BTC test transactions in preparation for their compensation plan. Recall that Mt. Gox Confirmed plans to begin repaying creditors in early July, with 141,687K BTC ($8.1 billion) as balanceThe development comes after the exchange moved 140K BTC to the current wallet in May in preparation for the refund.

Meanwhile, The Crypto Basic reported today that a dormant Bitcoin whale has awakened after 12 years to move 119 BTC. These moves have added to investor angst, leading to further sell-offs and triggering today’s declines. CryptoQuant has confirmed that new investors have sold their holdings, having recently unloaded $2.4 billion.

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the personal views of the author and do not reflect the views of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

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