The cryptocurrency market has been in a troubled state over the past three days, with Bitcoin (BTC) leading the charge in a dramatic decline. Bitcoin is currently testing a crucial support level around $56,500, while the total market capitalization of cryptocurrencies has slipped approximately 5 percent in the past 24 hours, hovering near $2.25 trillion as of early Thursday in New York.
In this turbulent environment, around $300 million has been liquidated from the leveraged crypto trading sector, predominantly impacting long traders.
Recent data from Arkham Intelligence reveals a significant development: the German government has been actively selling Bitcoin since June 18. Over the past few weeks, nearly 10,000 Bitcoins have been transferred to various exchanges.
On Thursday alone, the German government offloaded approximately 3,000 Bitcoins, valued at around $175 million. Presently, the German government retains about 40,350 Bitcoins, worth approximately $2.34 billion, positioning itself as a major whale in the market.
The recent wave of selling pressure has been increased by whale traders looking to capitalize on profits. With over 16 percent of Bitcoin holders currently in a losing position, the bearish sentiment could persist, particularly in the absence of bullish indicators.
Additionally, the upcoming $9 billion Mt. Gox Bitcoin distribution, slated to begin this month, has further contributed to the mid-term bearish outlook.
As Bitcoin approaches its pivotal support level around $56,500, many analysts anticipate a potential market rebound. However, if Bitcoin consistently closes below this threshold, further capitulation across the crypto market could be on the horizon.
In such a scenario, Bitcoin might descend toward the next major support range between $40,000 and $50,000.
Read Also: Crypto Market Crash: Will Bitcoin Price Drop Below $50K?
Will Bitcoin hold or break? Stay tuned for further updates!
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