- Bitcoin losses grip on the $60k price range, gives in to sell pressure.
- The U.S. government moved 10,000 BTC, fueling the FUD, but it may not be selling.
Bitcoin [BTC] has once again reverted 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 towards the weekend.
Bitcoin has been achieving lower highs since it achieved an ATH in March.
Bullish expectations were high after the crash at the start of August, but weak demand has been eroding the little market confidence and recovery expectations.
In the latest turn of events, BTC’s price has once again dipped below $60,000. This comes amid reports that the U.S. government recently moved 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 similar to the amount that the German government sold in July.
An outcome that resulted in significant sell pressure.
Is the government selling Bitcoin?
While it is possible that the U.S. government might sell some BTC, the recent findings may not necessarily indicate so. The transfer may have been for custodial reasons.
The U.S. Department of Justice selected Coinbase Prime to provide custody services.
Nevertheless, the announcement may have contributed to an already volatile situation. This comes amid Bitcoin’s failed attempt to push beyond $61,900.
The cryptocurrency may soon overcome this sell side pressure in the short-term as optimism makes its way back into the market.
Economic data that came out this week suggests that the FED may intervene soon. This includes consumer price index (CPI) data, which was lower than expected.
This means the Federal Reserve will most likely cut interest rates in September.
Rate cuts are considered good for risk-on assets such as Bitcoin because they pave the way for access to liquidity. But before then, the market has demonstrated caution due to rising risk of more downside.
This is also evident in the amount of BTC on exchanges.
BTC exchange reserves have been steadily declining this year. However, they recently leveled out and even registered some inflows.
The current outlook suggests that exchange reserves might be pivoting in favor of more upside.
Source: CryptoQuant
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A pivot to the upside in the amount of Bitcoin exchange reserves would support the idea that sell pressure is gaining traction. This would confirm Bitcoin’s possible move towards the low $50,000s.
However, if it sustains its downside, it will be building up towards a supply crunch.
