Bitcoin crashed to $26,166 on Friday and is still struggling to break back above the $26,500 level. what gives?
Cryptomarket analytics platform CryptoQuant said the recent decline could be due to a coordinated FUD campaign against the underlying cryptocurrency, which led to a wave of liquidations this week.
The US government has not sold its own bitcoin
in mail On Friday, a CryptoQuant IT Tech analyst called attention to a wave of “curated fake news” online related to the US government selling Bitcoin earlier this week.
He specifically called out to a Twitter account called Pisces stripedWhich he considered “one of the worst accounts to follow” due to publishing “false news without sources.”
🚨 The US government is selling Bitcoin pic.twitter.com/KXgfEpQBGv
– whale (WhaleChart) May 10, 2023
“Many accounts retweeted this news without any fact-checking, and as a result, we saw the second largest long-term liquidation in 2023, with over $36 million liquidated within one hour,” IT Tech wrote.
The US government is currently one of the largest holders of Bitcoin in the world, having seized billions of dollars in coins related to illicit financial activity over many years. Some of this money is linked to the online dark web market Silk Roadwhile others were associated with 2016 Bitfinex hack — the latter of which remains the largest financial forfeiture of all time.
According to the on-chain data platform glassThe US government’s on-chain balance is 205,514 BTC. This balance has not changed in recent days, last moving in early March when the government sold 9,861 BTC seized from Silk Road, which was openly disclosed weeks later.
CryptoQuant has a similar dashboard, which reports a slightly different number for the government’s Bitcoin balance at 204, 013 BTC. However, his timing of the last time the government moved its coins seems to match that of Glassnode.
However, there are concerns swept the market on Thursday, resulting in the liquidation of $150 million within a day, $40 billion of the total cryptocurrency market cap.
“Fortunately, we can verify this type of news using on-chain data,” the analyst added.
CryptoQuant is bullish on Bitcoin
in interview With CryptoQuant in April, company representatives told CryptoPotato that institutional investors are eyeing Q3 and Q4 2023 as a time to invest, waiting for confirmation that Bitcoin has left the bear market behind.
“These are from conversations that I’ve had primarily with institutional allocators and also people who are seed fundraisers as well,” said Benjamin Brannan, Head of BD and Strategy at CryptoQuant. “They were talking to different institutions or high net worth individuals.”
Brannan added that he doesn’t expect Bitcoin to retest post-FTX lows at $16,000 going forward — barring a “black swan” event like “Russia detonating a nuclear weapon in Ukraine, or Binance blowing up.”
Meanwhile, Chief Marketing Officer Hu Zhan Zhong claimed that Bitcoin could return to previous all-time highs by the second quarter of 2024.
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