Bitcoin Rebounds as German Sell-Off Ends, Institutional Demand Surges
Bitcoin has staged a notable recovery, surpassing the $65,000 mark, driven by a combination of factors including the conclusion of the German government’s Bitcoin sell-off and a surge in institutional demand.
Onchain data from Glassnode reveals a “near-term sell-side relief” for Bitcoin. The cryptocurrency’s price has rallied more than 20% since its July 12th low of $56,616, reaching an intraday high of $65,210 on July 16th. Glassnode attributes this rally to the complete exhaustion of the German government’s Bitcoin supply.
Historically, large entities such as miners and institutions have exerted significant sell-side pressure on Bitcoin prices. The recent price drawdown to $53,000 was largely attributed to the expected repayments from the defunct Mt. Gox exchange and the German government’s Bitcoin sales.
Glassnode’s analysis reveals that the German government offloaded the majority of its 48,800 Bitcoin holdings within a short window between July 7th and July 10th. Crucially, most of this selling occurred after Bitcoin’s price had already dropped to around $54,000, suggesting that the market had anticipated and priced in this selling pressure.
In addition to the end of the German sell-off, a surge in institutional demand has contributed to Bitcoin’s price recovery. Glassnode highlights a sustained period of inflows across all Bitcoin ETFs, with over $1 billion in inflows recorded during the previous week. This follows a broader trend of seven consecutive weeks of net inflows into spot Bitcoin ETFs, totaling over $300 million on July 15th, according to data from SoSo Value and CoinShares.
The influx of institutional capital has been instrumental in offsetting the sell-side pressure exerted by the German government. This dynamic is further supported by declining Bitcoin exchange flows, indicating a reduction in selling activity.
Glassnode’s analysis of exchange flows, which measure the volume of Bitcoin deposited and withdrawn from exchanges, reveals a significant decline since the all-time high set in March. This metric is considered a key indicator of investor sentiment and market liquidity. The stabilization of exchange flows around the $1.5 billion per day level suggests a decreasing likelihood of further price declines.
The confluence of factors, including the end of the German government’s Bitcoin sales, increased institutional demand, and declining exchange flows, has created a positive environment for Bitcoin. While challenges remain, the recent price recovery and underlying market dynamics suggest a potential shift in sentiment among investors.
