Bitcoin
Who is buying all the BTC dumped by Germany?
Bitcoin entered a downward spiral in the first week of July to hit a bottom below $54,000 amid a sell-off exacerbated by some large holders. Several reports using on-chain data blamed the sell-off on the German state of Saxony selling off bitcoins it seized earlier in the year.
Despite this significant sell-off, Bitcoin has largely held steady, with bulls successfully preventing further price drops. According to on-chain data, Bitcoin’s stalemate can be attributed to some whales, as many of them took advantage of the price drop to increase their holdings. Notably, Bitcoin whales added 71,000 BTC to their wallets this week.
Bitcoin Whales Acquire 71,000 BTC This Week
This week, Bitcoin whales went on an absolute feeding frenzy as they accumulated a whopping 71,000 BTC from cryptocurrency exchanges. While the German state of Saxony was busy offloading its cryptocurrency stash, these big players were more than happy to add to their already massive holdings.
This interesting whale activity was first noticed on social media platform X by Inside the Block. A look at the chart below shows that accumulation peaked during Bitcoin’s 15% drop from $63,600 on July 1 to $53,905 on July 5.
In addition to whale accumulation, spot Bitcoin ETFs witnessed steady inflows during the week despite the decline in spot prices. The funds positive net flows recorded every day of the week, with the largest net inflow of $310 million on July 12.
Bitcoin holding up
The German state of Saxony sold over $2 billion worth of Bitcoin last week, flooding the market with BTC. When this sell-off initially began, many traders and market participants were skeptical about whether an already bearish Bitcoin could survive the selling pressure. Many analysts were even anticipating a price decline towards $47,000. On the other hand, other analysts believed that the sell-off was overdone.
Despite this back-and-forth scenario, Bitcoin managed to scale through the sell-off and absorb the impact of the sell-off better than many would have expected. This showed that the cryptocurrency has now reached stability, preventing further price declines.
It also highlights the growing maturity of the cryptocurrency market, which has been characterized by high levels of volatility over the years. A $2 billion liquidation is tiny compared to Bitcoin’s $1.18 trillion market cap. To break it down, that $2 billion represents less than 0.2% of Bitcoin’s total market cap.
At the time of writing, Bitcoin was trading at $59,960. The bulls are now eyeing a break above $60,000 again. Breaking and holding above $60,000 would set the stage for a further price increase next week.
Featured image from Getty Images, chart from TradingView