- Bitcoin Losses Maintain Grip at the $60,000 Price Range and Give in to Selling Pressure.
- The US government moved 10,000 BTC, fueling the FUD, but it may not sell.
Bitcoin [BTC] has returned to the downside after a brief stint above the $60,000 price range. As a result, investors were more curious about the risks of more potential downside heading into the weekend.
Bitcoin has hit lower highs since hitting an ATH in March.
Bullish expectations were high after the early August crash, but weak demand has eroded what little market confidence and recovery expectations there were.
In the latest turn of events, the price of BTC has once again fallen below $60,000. This comes amid reports that the US government has recently taken action 10,000 BTC to Coinbase Prime.
This move has contributed to the return of FUD among Bitcoin holders. The amount of BTC moved was almost equal to the amount the German government sold in July.
A result that resulted in significant selling pressure.
Does the government sell Bitcoin?
While it is possible that the US government is selling some of the BTC, recent findings do not necessarily indicate that. The transfer may have been for reasons of deprivation of liberty.
The US Department of Justice has chosen Coinbase Prime will provide custody services.
Nevertheless, the announcement may have added to an already volatile situation. This comes amid Bitcoin’s failed attempt to break above $61,900.
The cryptocurrency could soon overcome this short-term sell-side pressure as optimism makes its way back into the market.
Economic data released this week suggests the Fed could intervene soon. This includes consumer price index (CPI) data, which was lower than expected.
This means that the Federal Reserve will most likely cut spending interest rates in September.
Rate cuts are considered good for risky assets like Bitcoin as they pave the way for access to liquidity. But before then, the market has shown caution due to the increasing risk of more downside.
This is also evident from the amount of BTC on exchanges.
BTC’s foreign exchange reserves have steadily declined this year. However, recently they have stabilized and even recorded some inflows.
The current outlook suggests that foreign exchange reserves could turn in favor of more upside potential.
Source: CryptoQuant
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A positive spin on the amount of Bitcoin exchange reserves would support the idea that the selling pressure is gaining momentum. This would confirm Bitcoin’s possible move towards the low $50,000s.
However, if the downward trend continues, there will be a supply crisis.