Bitcoin bulls might have reason to cheer, with the German government’s Bitcoin fire sale nearing its end. This significant selling pressure, combined with technical indicators, suggests a potential local bottom for the leading cryptocurrency.
Just three weeks into its Bitcoin disposal program, the German government’s wallet has dwindled to a mere 3,856 BTC. This aggressive sell-off, totaling $222 million, has undoubtedly contributed to Bitcoin’s price dip below $60,000 in recent weeks. However, with the majority of the coins sold, selling pressure is expected to ease, potentially paving the way for a price recovery.
The German government confiscated these Bitcoins in February 2024 from Movie2k, a notorious pirate movie website. The proceeds from the sale are likely to be directed towards government initiatives.
The depletion of the German government’s Bitcoin reserves could be a turning point for the cryptocurrency’s price. Technical analysis using the Wyckoff Method, a price action-based trading strategy, suggests a potential bottom is forming. Popular crypto analyst Moustache leverages this method and predicts an imminent price rise above the psychological $60,000 barrier.
“I think we will see BTC back above $60,000 very soon,” Moustache stated in a recent social media post.
Beyond the Wyckoff analysis, other technical indicators also hint at a potential bottom. Crypto trader MartyParty shared a chart highlighting the “Coinbase Premium,” which measures the price difference between Bitcoin on Coinbase (a popular exchange among US investors) and Binance (a global exchange). A positive Coinbase Premium suggests stronger demand for Bitcoin in the US compared to the rest of the world, potentially indicating a buying opportunity.
Will Bitcoin Reclaim $60,000?
While the German government’s dwindling Bitcoin reserves and supportive technical indicators offer a glimmer of hope for Bitcoin bulls, some uncertainty remains. The cryptocurrency needs to hold above the critical support level of $56,700 to solidify a price bottom and fuel a sustainable recovery.
The coming days will be crucial in determining Bitcoin’s next move. If the price manages to stay above $56,700 and surpass the $60,000 resistance zone, a more convincing bullish scenario could unfold. However, a break below $56,700 could signal a further price decline.
