Bitcoin Falls Below $58,000 as Wallet Activity and German Government Movements Trigger Selling Pressure
Bitcoin has dropped below $58,000 for the first time since May, experiencing a 5% loss in just a few hours.
This significant price decline comes as wallets associated with now-defunct cryptocurrency exchange Mt. Gox and a German government entity have shown signs of activity.
Activity in Mt. Gox Wallets
Inactive for a month, wallets associated with Mt. Gox have shown test transactions, potentially indicating asset distributions and increased selling pressure. Mt. Gox is expected to begin distributing stolen assets to customers from the 2014 hack this month, although the exact date remains unclear after multiple delays.
Reimbursements will be made in Bitcoin (BTC) and Bitcoin Cash (BCH), which could add selling pressure to both markets, with around $9 billion in funds to be distributed.
Movements of German Government Wallets
Meanwhile, a wallet owned by the German Federal Criminal Police Office transferred nearly $175 million in Bitcoin, with deposits made to crypto exchanges.
Arkham’s data shows that the German wallet transferred $175 million in BTC to various wallets, with $75 million sent to Kraken and Coinbase exchanges. Miguel More, CEO of Arkham, explained that transfers from a wallet to an exchange can indicate an intention to sell tokens.
Technical Indicators and Market Outlook
Bitcoin has now fallen below a widely watched technical indicator for the first time since October, signaling a possible bearish trend in the months ahead. After being range-bound for some time, the price of BTC has finally broken free from its $60,000 support.
With Mt. Gox and the German government showing signs of potential sales, Bitcoin could experience increased short-term volatility after several weeks of calm.
