Bitcoin’s price has fallen again. after seeing some recovery Due to the turnaround of the net flows for the Spot Bitcoin Exchange Traded Funds, the price rose on Wednesday. Just one day after, the cryptocurrency pioneer has re-entered the downward trend. This decline, which began just after the recovery, is a concern. What are the reasons for this drop?
Bitcoin price suffers from sell-offs
The main reason for the Bitcoin decline It is not just investors who are selling off their digital assets. The governments that are orchestrating these large BTC sales, not investors alone.
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The German government began selling coins. This was one of the biggest news stories in the world. The total amount of the German government sold around 2,786 BTCThe sale of this property was valued at approximately $$140 Million.
The German government has not been the only one to sell. News broke out that the US Government had also begun to move Bitcoin confiscated from the Silk Road Bust again. Arkham, an on-chain data aggregater, reported that the US Government had transferred almost 4,000 BTC to Coinbase from their wallets.
In total, the US government moved 3,940 BTC to the exchangeThis transfer is alarming as coins are usually moved to centralized exchanges such as Coinbase for sale, since these trading platforms have a greater liquidity than their decentralized counterparts. This is a worrying transfer as most coins move to Coinbase, a centralized trading platform that has comparatively more liquidity.
BTC: Has it reached the bottom?
There are some signs to suggest that the bottom has been reached, even though the downward trend appears to be continuing. The return of the demand in the market is one of the signs. The Spot Bitcoin ETFs, for example, had experienced a significant increase in demand. seven consecutive days of outflowsData from Coinglass shows that the. Coinglass Data shows The brutal outflow week has ended with the inflow of $50 million between Tuesday and today.
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Profit and loss margins for investors is another way to tell. It shows the number of investors. Bitcoin investors Profits are being made, and as profits increase, so does the probability of an investor selling their position.
The profitability has dropped. This means that the investors will be less inclined to sell as they await better prices. It gives the demand time to increase and can create a bounce point in a recovery.
Bitcoin is currently trading at $61,000. If the sell-offs continue, however, Bitcoin will be less valuable. could fall to the $60,000 level soon.
Featured image was created with Dall.E chart, from Tradingview.com
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Source: www.newsbtc.com