Bitcoin Faces Selling Pressure as $1.2 Billion Moved to Exchanges

Sustained selling pressure has gripped Bitcoin as exchange deposits surged, driven by bearish market sentiment.

According to IntoTheBlock data, crypto holders have transferred over 21,000 Bitcoin (BTC) to centralized exchanges such as Binance and Coinbase in the past week alone. The total amount of BTC moved to these trading venues exceeded an estimated $1.2 billion, with the token trading around $55,000 on Friday.

Understanding Bitcoin’s Decline

Bitcoin’s 21% decline over the past month underscores sustained selling pressure, influenced by macroeconomic factors, institutional capitulation, government sales, creditor repayments, and market uncertainty. Despite inflation data in the U.S. showing signs of deceleration, it has not been sufficient to prompt interest rate cuts from the Federal Reserve. The central bank continues its tighter monetary policies, reducing risk appetite as it strives for a 2% inflation target.

Following the halving, which reduced block rewards by 50%, some miners liquidated millions in crypto to cover business expenses. Although this trend has slowed, BTC remains below its $73,000 peak from March and has trended sideways or downward since April. Consequently, mining stocks have suffered during the recent dip.

Spot BTC ETF flows have stagnated, with trading volumes for BTC-backed products on Wall Street reflecting these price movements, as noted by ETF expert James Seyffart.

Government Sales and Market Impact

Authorities in Germany and the U.S. have sent thousands of Bitcoin to exchanges in the last two weeks. At least one German lawmaker criticized the government’s BTC sell-offs, suggesting that the crypto should be retained as a reserve asset. In the U.S., officials moved $240 million worth of seized Silk Road BTC to Coinbase, typically a precursor to market sales. Observers have highlighted that the U.S. utilizes a platform sued by the Securities and Exchange Commission for alleged federal violations.

Bitcoin’s 2% drop on Friday was partly attributed to Mt. Gox repayments. As reported by crypto.news, the defunct crypto exchange commenced user reimbursements a decade after one of the largest BTC hacks.

Broader Cryptocurrency Market Trends

The total cryptocurrency market is experiencing a widespread downturn, led by Bitcoin’s decline in recent months. According to IntoTheBlock, the digital asset industry lost 8% in 24 hours, dropping to a five-month low of $2 trillion. However, cryptocurrencies have collectively surged 24% over the past six months and 73% over the past year, highlighting significant long-term gains despite recent volatility.

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