There are fears of a possible Bitcoin price drop after the US government moves 19,800 BTC ⋆ ZyCrypto

The US government recently transferred 19,800 Bitcoin (BTC) worth about $1.92 billion to a Coinbase Prime wallet. This sparked fears of a possible sell-off in crypto circles, and traders were on high alert. The assets transferred to Coinbase are part of the Silk Road seizures.

In 2022, the US Department of Justice (DOJ) seized over 50,000 BTC from the Silk Road dark web.

On-chain analysts point to transfers

Data from Arkham Intelligence’s on-chain cryptocurrency showed that the transfer was split between two wallets. The government transferred $969 million to the first wallet, while $949 million was transferred to the second address. There are now 188,303 BTC in the government’s wallet, which is currently worth $18.2 billion.

The transfer sparked concerns about a sell-off among market participants. This is because transferring assets to centralized exchanges often indicates a possible sale, while transfers to other custodians indicate a long-term holding strategy. A similar situation occurred in July, causing the market to collapse. Specifically, the US government sold 29,799 BTC, after which the price of the asset fell by 24%.

“A transfer of such a large amount of Bitcoin to an exchange, particularly Coinbase Prime, often signals an intention to sell or distribute it.” This can lead to bearish sentiment as market participants anticipate increased supply. When the US government sold 29,799 BTC on July 29, 2024, the market experienced a sharp price drop, with Bitcoin losing over 24% in value. Such large-scale government sales typically generate significant selling pressure.” Crypto analyst Amr Taha noted.

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Bitcoin price falls

The impact of the US government transfers was felt in the market as it undermined efforts at a price recovery. The price of Bitcoin plunged 2.3% to trade at $95,568 as traders continue to monitor the situation. The market leader influences the broader market and could reignite, leading to a rally in altcoins.

This was evident in the last meme coin rush when prices moved following huge inflows into BTC. Meme coins are significantly influenced by community rallies on social media, among other things. In the last 24 hours, top meme coins like Bitcoin also saw outflows; However, new assets saw significantly larger outflows.