Bitcoin
Bitcoin plummets after US government moves $2 billion in BTC: what’s next?
Bitcoin has been trying to regain its foothold in the $70,000 zone since the market rejected it over a month ago. Over the past few days, it has been struggling with multiple resistances at various levels. On July 29, it finally managed to touch this point but could not hold it for long. The price dropped to $66,500, breaking multiple support levels and passing through all MAs in its path, after facing over 4% rejection. Let’s explore the reasons for this sudden drop and what to expect next.
Multiple supporting factors
There were many factors that helped Bitcoin climb all resistance levels to hit the $70,000 mark after a month. The biggest of them all is former US President Donald Trump’s speech during the Bitcoin Conference 2024 in Nashville.
Trump has openly expressed his support for Bitcoin and the crypto ecosystem. He has promised that he will not sell the Bitcoin that the US government has confiscated if he is elected. Instead, he has proposed his desire to turn the seized Bitcoin into a strategic reserve. Donald Trump has, on multiple occasions, shared his willingness to make the US the largest player in Bitcoin. He wants Bitcoin and the entire crypto ecosystem to flourish in the US.
The greatest resistance
The $70,000 zone is one of the biggest resistances as it is a former ATH for Bitcoin. According to experts, this would be the biggest challenge for BTC. This level had a lot of liquidity from selling pressure, hence it failed to hold its position and was rejected. The MA 20 tried to hold the price around $69,000, however, the intensity of selling pressure broke it. It even crossed the next support level at $68,000. After that, panic started among traders, causing the price to fall even further.
Source: TradingView
US Government BTC Movement
At the same time that BTC was already falling due to high selling pressure, the US government made some moves on its Bitcoin holdings. Arkham’s data shows that they moved 29.8k BTC worth $2.02 billion out of the 183,439 Bitcoins they hold to an unknown address. This brought a new kind of fear to the market. When this news broke, many tweets claiming that the US government is planning to sell these BTCs emerged, causing panic in the market. This resulted in Bitcoin falling to $66,500.
Source: Arkham
At the time of writing, Bitcoin is trading at $67,330, however, the hourly chart shows that a support level of $66,800 is now acting as a resistance and the most recent support is 200MA.
What to expect next
As of now, the owner of the wallet that received $2.02 billion worth of Bitcoin from the US government is still unknown. Therefore, it is almost impossible to say what their next move might be. Is it some other government wallet and they are planning to use this BTC for some purpose or it was just a move, no one can say that for sure. However, we are sure that some information will surely surface in the near future. Bitcoin is trying to hold the price right now as the bearish power is decreasing. We can only hope that the price will rise again soon as there is a support environment being built around the globe to crypto.