“Saxony’s Ongoing Bitcoin Liquidations Ruffle Crypto Markets”


Bitcoin holds steady at around $58,500 amid fresh movements of cryptocurrency by the German state of Saxony, failing to maintain gains above $59,000 during the Asian trading hours. The leading cryptocurrency by market value was trading at $58,470, down 1.6% from the high of $59,450 reached at 1:06 UTC, according to CoinDesk data.

Today, the German Federal Criminal Police Office (BKA) moved over 10,853 BTC worth approximately $637 million to exchanges Kraken and Coinbase, as well as market makers such as Cumberland and Flow Traders. This continued a proactive approach of liquidating BTC that was previously seized from a privacy website. The German state of Saxony has been in the process of moving bitcoin for several weeks now, adhering to standard procedures.

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In a significant shift, the German Government lost its “Bitcoin billionaire” status today. In the past hour alone, another 2,000 BTC, valued at around $117.3 million, were sent to Coinbase, Kraken, and other addresses. The BKA wallet now retains 13,360 BTC, worth approximately $784.96 million, which is 26.8% of the Bitcoin originally seized from the Movie2k piracy operation.

Since mid-June, Saxony has liquidated 30,997 BTC, causing turbulence in the crypto market. Over the last four weeks, Bitcoin’s value has decreased by more than 15%, briefly touching a low of $53,550 last week. As of now, the government’s wallet holds 13,360 BTC valued at $784.96 million.

Over the past three weeks, the German government has sold 32,000 BTC in the open market, amounting to around $1.856 billion at current prices. This activity coincides with Mt. Gox’s announcement and implementation of its creditor distribution plan, contributing to market inefficiencies.

Despite these liquidations, Bitcoin’s stability suggests the market is acclimating to the continuous divestment. Analyst Valentin Fournier from BRN noted that the market is growing more comfortable with outflows from both Mt. Gox and the German government. He pointed out that Bitcoin Exchange-Traded Funds (ETFs) are seeing strong inflows once again, signaling a potential trend reversal. This is reinforced by the Relative Strength Index (RSI), which indicates that the previously undersold level has been viewed as a buying opportunity by investors.

Fournier expects positive news from the upcoming U.S. Consumer Price Index (CPI) report on Thursday but anticipates that the Federal Reserve will delay rate cuts until September. He warns that any hawkish comments, similar to those made after the strong Personal Consumption Expenditures (PCE) report on June 28, could prompt the market to react as if inflation is not decreasing. Therefore, he recommends investors take profits ahead of what could be a volatile end to the week.

Despite these near-term challenges, the broader market outlook remains optimistic, with major economies experiencing an expansionary phase and traditional markets showing peak optimism for technology stocks.