ANALYSIS: Markets Overreact to U.S. Government's Bitcoin Sale

The price of bitcoin has fallen further as today's transfer by the U.S. government added to the selling pressure, Cointelegraph reports. Axel Adler Jr., a contributor to CryptoQuant, an on-chain analytics platform, said that large market participants are dominating the risk-averse reaction to the latest transfer by “selling the news. Whenever Arkham tweets about currency movements, shorts immediately start selling the market,” he notes. The 10,000 bitcoins sold by the U.S. government won't have any impact, but the very fact of it will cause such a reaction.”

According to crypto intelligence firm Arkham, the largest batch of cryptocurrencies confiscated by the U.S. government this year totaling 10,000 BTC (valued at $581 million) was transferred to Coinbase for trading. This event counteracted any positive effects of macroeconomic changes in the US, such as the failure of the Consumer Price Index (CPI) to boost the price of Bitcoin. Analytics platform Lookonchain shows that bitcoin transfers from the U.S. government in 2024 have repeatedly triggered a copycat reaction in the market. This year, the U.S. government transferred 15,940 BTC worth $966.4 million to Coinbase Prime in three transactions. The price of bitcoin fell by about 5 percent in the three days following each of the first two transfers.