The cryptocurrency market experienced a major drop as the US government allegedly sold 9,800 bitcoins (BTC) worth $277 million, according to certain reports. The US government seized the bitcoins in question during the Silkroad case, as mentioned By Whale Wire on Twitter.
Bitcoin investors are preparing for the impact
The US government’s alleged sale of such a large quantity of bitcoin had a ripple effect on the market, with prices plummeting in minutes. This is not the first time there have been reports that the US government has sold bitcoin, but it could be one of the biggest sales.
Bitcoin’s recent roller coaster ride has caused investors to hold on tight. After reaching the $28,000 level after the Federal Reserve (Fed) Consumer Price Index report, news of the US government selling $277 million worth of Bitcoin caused a market pullback.
Other parties, including independent analysts and research firms CryptoQuant and Arkham, objected to the deal. Large bitcoin transactions linked to the US government have caused controversy in the past. Similar to today’s price action, the news sparked fear and uncertainty among investors.
In this sense, the news should be taken with caution. According to a pseudonymous analyst:
38 minutes ago, too many were 9,800 BTC dollars The transaction, valued at $264 million, was sent from a purse controlled by the US government.
As a result, the BTC price fell by 5.3%.
However, after examining the origin of the funds and receiving confirmation from Arkham, there is no… pic.twitter.com/uT9uVHpGQ2
– monkey prologue (apes_prologue) May 10, 2023
This led to a 0.7% retracement and a drop to $26,800. But, like a phoenix rising from the ashes, bitcoin bounced back and climbed above the 50-day moving average support at $27,200.
Despite this, according to Whale Wire, even if the US government sold, it would still hold more than 200,000 bitcoins; Prices can drop below $10,000 immediately if they were to sell for that amount. This raised questions about the government’s intentions regarding their Bitcoin holdings and whether they would continue to sell them in large quantities.
It is also alleged that the US government sold 9,800 bitcoins on March 14, confiscated from criminals involved in illegal activities on the Silk Road website. At the time of the auction, the bitcoin was priced at around $26,000 and valued at about $215 million.
according to Court filingThe US government plans to sell another 31,700 bitcoins in connection with the Silk Road. This online market facilitated illegal activities and was taken over by law enforcement agencies in 2013. However, it remains to be seen if these events will delay the rise of Bitcoin and further drop the BTC price to new lows.
Featured image from Unsplash, chart from TradingView.com
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