One of the major reasons behind the recent decline in Bitcoin’s price is the sell-offs orchestrated by large governments. The German government, for example, sold around 2,786 BTC, worth approximately $140 million. Similarly, the US government moved almost 4,000 BTC from its wallets to the Coinbase exchange, totaling $241.22 million. These large sell-offs by governments have had a significant impact on the digital asset’s price.
Despite the ongoing decline, there are signs that point to a potential bottom in the market. The return of demand is one such indicator. After seven consecutive days of outflows, the Spot Bitcoin ETFs saw a turnaround with inflows crossing $50 million between Tuesday and Wednesday. This surge in demand suggests that investors may be looking to capitalize on lower prices.
Another factor to consider is the profit and loss margin for Bitcoin investors. A drop in profitability levels indicates that investors are less likely to sell their holdings at the current prices. This reluctance to sell could give demand time to build up, potentially leading to a bounce back in the market. As of now, the Bitcoin price is holding steady at the $61,000 support level.
Overall, the recent decline in Bitcoin’s price can be attributed to a combination of government sell-offs and changing market dynamics. While the current situation may seem bleak, there are signs that point to a potential recovery in the near future. Investors should closely monitor these driving factors to make informed decisions regarding their Bitcoin investments.