The German government has transferred over 3,000 Bitcoin within one hour, bringing the total BTC volume moved by the authorities in the last 24 hours to a five-figure amount. These transactions are part of a broader sell-off trend initiated on June 19, despite opposition from some members of parliament.

Call for Strategic Reserve

German lawmaker and Bitcoin advocate Joana Cotar has urged the government to halt its rapid disposal of state-owned Bitcoin. Cotar argues that retaining Bitcoin could serve as a strategic reserve currency, providing protection against the risks associated with the traditional financial system. She believes that maintaining BTC in the country’s treasury could aid in diversifying assets, promoting innovation, and hedging against inflation.

Arkham Intelligence data showing the last four hours of transactions made by the German Government wallet. Source: Arkham Intelligence

Heavy Bitcoin Movements

In the last 24 hours, the government-controlled wallet, currently holding 35,488 BTC worth over $2 billion, has seen significant activity. The address received 4,340 BTC, of which over 3,000 BTC have been transferred to exchanges or unknown addresses. This activity follows a series of transactions since June 19, which saw more than half of the received BTC being moved out of the wallet.

Political Disagreement on BTC Strategy

On July 4, Cotar issued a statement urging the government to reconsider its strategy of selling BTC, describing the move as “counterproductive.” Despite her appeal, the government proceeded to sell another $172 million worth of Bitcoin later that day. The wallet in question, which previously held over 42,200 BTC worth $2.4 billion, has now reduced its holdings to just over 35,400 BTC valued at $2 billion.

Additional Market Sell Pressure

The market sell pressure is further compounded by the recent announcement from the defunct crypto exchange Mt. Gox. The exchange has begun repaying its BTC and Bitcoin Cash debts, adding to the ongoing sell pressure. Nobuaki Kobayashi, the trustee overseeing the repayments, confirmed that the process is being carried out in accordance with the Rehabilitation Plan. A recent update from MtGoxBalanceBot indicated that over 47,000 BTC of the trustee’s known addresses, which hold a total of 94,400 BTC, have been moved.

Bitcoin and other risk assets might gain from a weakening job market and rising unemployment in the United States, the world’s largest economy.

The U.S. unemployment rate rose to 4.1%, exceeding the anticipated 4.0%, marking its highest level since December 2021. In June, the U.S. economy added 206,000 jobs, surpassing the expected 191,000 but significantly lower than the revised 218,000 jobs added in May, according to the Bureau of Labor Statistics’ nonfarm payroll data released on July 5.

BTC/USD, YTD chart. Source: TradingView

A weakening labor market in the U.S. could positively impact Bitcoin’s price, according to Jag Kooner, head of derivatives at Bitfinex.

“If the NFP report shows weaker-than-expected job growth, it could increase expectations for future rate cuts, which might bolster Bitcoin prices as investors seek alternative assets in anticipation of a looser monetary policy”.

Bitcoin’s Price Struggles

Bitcoin’s price has been in a downtrend for over a month, falling below the significant $60,000 mark. On July 5, Bitcoin dropped over 10.5% within 24 hours, reaching a more than four-month low of $53,550. According to Bitstamp data, the last time Bitcoin traded at this level was in February 2024.

BTC/USD, 1-week chart. Source: Rekt Capital

While some traders worry that the bull cycle has ended, analysts like Rekt Capital see the current correction as consistent with past Bitcoin corrections. Rekt Capital noted in a July 4 post,

“This pullback is -21% deep & 45 days long. In this cycle, average retrace depth is -22% & average retrace duration is 42 days. In terms of retrace depth, this is almost an average retrace. In terms of retrace duration, this is an above-average pullback.”

Bitcoin ETF Flows Lagging

Institutional inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) have been lagging. The U.S. ETFs are set to log their third consecutive week of net negative inflows, with over $315 million worth of cumulative net outflows so far this week, according to Dune data.

Bitcoin ETF net weekly flows. Source: Dune

Kooner suggests that Bitcoin ETF flows might see an uptick if the weakening labor market drives expectations of potential interest rate cuts.

“Bitcoin ETF flows might see an uptick if market participants believe that economic uncertainty will drive the Fed towards eventual rate cuts, enhancing the appeal of Bitcoin as an inflation hedge. However, significant inflows would depend on broader market sentiment and risk appetite,” Kooner said.

Despite these possibilities, Kooner also notes a recent lack of inflows and “dip-buying” purchases.

Bitcoin sought a rebound as the market digested the start of Mt. Gox reimbursements. Data from Cointelegraph Markets Pro and TradingView tracked a 3.8% rebound in Bitcoin (BTC) prices from lows of $55,550 on Bitstamp, marking the lowest levels since late February.

Bitcoin Bull Market: “Rocky Road Ahead”

Market observers, while surprised at the latest downside extent, attributed the decline to the start of transfers from wallets affiliated with the Mt. Gox rehabilitation proceedings. Popular trader Daan Crypto Trades commented, “The first transfers have begun. The market sold off again following these transfers. Now comes the time where we’ll figure out how much is getting sold and how the market absorbs it. Rocky road ahead but after this massive supply overhang is cleared, that’s great for the space in the long run.”

BTC/USD 1-hour chart. Source: TradingView

The total funds involved in the distribution to Mt. Gox creditors exceed $8 billion in Bitcoin and Bitcoin Cash. Despite the sell-off, BTC/USDT continued to respect a broad downward trending channel, a sign seen as encouraging by some market participants.

Challenging Times for Bitcoin Holders

Even bullish voices within the trading community acknowledged the challenging times for Bitcoin holders. “Bitcoin’s higher timeframe market structure is being put to the test,” noted popular trader Jelle. He highlighted the importance of the three-day chart and emphasized the need for BTC to close above $57,000 to maintain a bullish structure.

Ichimoku Cloud and BTC Price Monthly Close

The latest weekly candle further pressured the bull market from the perspective of the Ichimoku Cloud indicator. At $56,150, the price fell below the Kijun Sen trendline on weekly timeframes, with the candle sandwiched between it and the upper trendline, Tenkan Sen.

BTC/USDT chart. Source: Daan Crypto Trades/X

Commenting on the setup, popular trader Titan of Crypto suggested that a close below Kijun Sen on monthly timeframes would require a rethink of the overall bullish market structure. “From Ichimoku’s perspective, unless a monthly candle closes below Kijun and confirms with the following monthly candle, Bitcoin remains bullish,” he stated in a recent X post.

The market continues to closely monitor the impact of Mt. Gox reimbursements and overall market sentiment as Bitcoin attempts to regain stability and upward momentum.

The German government has once again transferred a significant amount of Bitcoin, raising suspicions of an impending sell-off. On July 2, a cryptocurrency wallet labeled “German Government (BKA)” moved $52 million worth of Bitcoin, suggesting a strategy to liquidate its vast BTC holdings.

Recent Bitcoin Transfers

According to Arkham Intelligence data, the government wallet transferred 832.7 BTC in four separate transactions. The breakdown is as follows:

• 100 BTC to Coinbase
• 150 BTC to Bitstamp
• 32 BTC to Kraken
• 550 BTC worth over $32 million to the unknown wallet “139Po”

This wallet “139Po” has previously received funds from the German government, including 500 BTC on June 25 and 800 BTC on June 20.

Implications for Bitcoin Price

The repeated Bitcoin transfers to centralized exchanges indicate a potential plan to sell, which could introduce more selling pressure on Bitcoin’s price. The BKA-labeled wallet holds over 43,850 BTC, valued at approximately $2.75 billion. Tracking the selling patterns of large Bitcoin holders is crucial for investors, as significant sell orders can create downward price pressure.

Bitcoin has been in a downtrend since early June, falling over 7.3% in the past month. BTC found a local bottom above $58,450 on June 24 before bouncing back above $62,000. Despite this, Bitcoin has strong support at $61,500. However, a move below this level could liquidate over $1 billion in leveraged long positions across all exchanges, according to Coinglass data.

The substantial transfer of $32 million worth of Bitcoin and additional transfers to centralized exchanges indicate the German government may be planning a Bitcoin sell-off.

Background on Bitcoin Holdings

The German government-labeled wallet first raised concerns about a potential sell-off on June 19, when it transferred 6,500 BTC worth over $425 million. Before this transfer, the wallet held nearly 50,000 BTC since February 2024. These funds are believed to have been seized from the pirated movie website operator, Movie2k.

BTC/USD 1-month chart. Source: TradingView

As the situation unfolds, the market will closely watch the German government’s next moves, given the potential impact on Bitcoin’s price and overall market sentiment.

Peter Schiff, a well-known financial commentator and vocal critic of Bitcoin, recently took to social media with a series of satirical posts that sparked widespread attention. Schiff proposed a hypothetical scenario where all publicly traded U.S. companies liquidate their assets, cease operations, and invest entirely in Bitcoin.

Schiff’s Satirical Scenario

In his posts, Schiff suggested that if U.S. companies converted all their assets to Bitcoin, each Bitcoin would be worth millions, dramatically increasing the market capitalization of U.S. stocks and theoretically making everyone wealthy. He extended this narrative to his own investments in U.S. oil stocks, implying that if these companies also converted their assets to Bitcoin, their stock values would soar, enriching investors like himself.

Schiff vs. Bitcoin Maximalists

Schiff’s comments are aimed at Bitcoin maximalists, who argue that Bitcoin is destined for unlimited growth and will become the cornerstone of global finance and society. In stark contrast, Schiff has consistently criticized Bitcoin, labeling it a bubble and a scam with no intrinsic value.

Bitcoin’s Current Performance

Despite Schiff’s criticism, Bitcoin’s price remains resilient, trading around $68,000 per coin. Earlier today, Bitcoin saw a slight decline of over 1.5%. The cryptocurrency is still within striking distance of its all-time high of $74,000, just 9% short of this peak.

Schiff’s satirical posts serve as a reminder of the ongoing debate between Bitcoin skeptics and enthusiasts. While his hypothetical scenario may be far-fetched, it underscores the divergent views on Bitcoin’s potential and its role in the future of finance.