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Explained: Why Bitcoin Price Fell Below $65,000 After BKA's $425M BTC Transfer

Bitcoin price falls below $65,000 after BKA's $425M transfer.

Thu, 20 Jun 2024, 01:20 am UTC

Bitcoin's price fell below $65,000 today after the German Federal Criminal Police Office moved $425 million in BTC, leading to market speculation and anxiety.

Speculative Effects of BKA's Massive Bitcoin Transfer

At the same time that the German Federal Criminal Police Office (BKA) reported large BTC movements, the price of Bitcoin fell below $65,000 today.

Arkham claims that the BKA transferred $425 million worth of Bitcoin to various wallets, including Kraken and Bitstamp, which has prompted speculation on the possible effects on the markets.

A significant amount of Bitcoin was transferred on June 19th by the German Federal Criminal Police Office (BKA). The BKA removed 6,500 BTC, or $425 million, from their wallet using data from Arkham.

Kraken and Bitstamp each received $32 million worth of Bitcoin. These deals could indicate that selling some of the assets is in the cards.

Claiming to have transferred $130 million worth of Bitcoin to "service wallets," Arkham CEO Miguel More has dropped hints that the company is planning to sell. The Mantle blockchain strategist @Defi_Maestro saw the transfer on social media site X first, which could lead to market volatility.

Market Reacts to $425M BTC Transfer by German BKA

Market mood was impacted quickly following the announcement regarding BKA's Bitcoin transactions. After the transfers, analysts noticed a rise in short positions and a little decline in Bitcoin price. As a result, the price of Bitcoin fell below $65,000, a pattern seen previously following massive transactions involving government entities.

While some analysts think this would cause a stir in the market, the actual amount of Bitcoin sent to Kraken and Bitstamp was around 500 BTC each. Markets may see temporary ups and downs if investors learn that the government is selling off assets.

Along with other market indicators that provide confusing signals, the German government's recent activity occurred at the same time.

Investor Response to BTC Price Movements​

Coingape reports that the decline in Bitcoin's market share, from 54.31% to 0.93%, suggests that investors are shifting their focus to alternative cryptocurrencies. A minimal net outflow from the Bitcoin exchange balance is also optimistic, suggesting that traders are choosing to hold onto their Bitcoins instead of selling them.

Despite the recent correction, the overall sentiment remains hopeful as the Crypto Fear & Greed Index declined by 13.51% to 64, still within the "greed" region. Bitcoin futures and options, on the other hand, have been seeing an increase in open interest, which might mean more institutional investors or more speculation.

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