Bitcoin Drops Below $93K as US Government Gets Clearance to Sell 69,370 BTCs amid Heightened Selling Pressures

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The price of Bitcoin (BTC) decreased by approximately 3% within the last 24 hours, dropping to a low of around $92,806. This bearish trend was observed across the altcoin market as well, leading to liquidations exceeding $483 million, primarily affecting long traders. Additionally, Bitcoin’s 24-hour volatility is at 2.5%, while its market cap stands at approximately $1.85 trillion and its 24-hour trading volume amounts to $66.26 billion.

Concern over potential additional adjustments in cryptocurrency prices has grown substantially, given that Bitcoin’s value is nearing a pivotal support point above $92,000. Additionally, the Fear & Greed Index for Bitcoin has dipped from 78% to 69% within the past two days.

According to Coinspeaker’s analysis, it appears that the price trend for Bitcoin might persist as bearish following the formation of a possible head and shoulders (H&S) configuration, along with a bearish discrepancy in the daily Relative Strength Index (RSI).

As an analyst, I’m observing that according to renowned trader Peter Brandt, Bitcoin’s (BTC) daily chart seems to be shaping up as a Hump Slump Bump Dump Pump and Dump pattern. However, if we consistently see closing prices dipping below the current support level around $92K, it’s probable that we might witness a short-term decline, potentially bringing the price down towards the range of $85K to $86K.

Top Reasons Why Bitcoin Price Dropped Today

As an analyst, I observed a significant surge in selling activity related to Bitcoin following the announcement that the U.S. government has been authorized to auction off 69,370 BTCs, which were seized from the defunct Silk Road darknet marketplace. The court’s decision to sell these Bitcoins, valued at approximately $6.5 billion, comes after years of legal disputes over ownership rights.

The process of selling off the Bitcoin held on the Silk Road platform will be handled by the United States Marshals Service. Over the past few months, they have been transferring these funds to Coinbase Prime, a service designed for institutional investors.

It’s worth noting that just before the highly anticipated second inauguration of President-elect Donald Trump, the sale of the Bitcoin hoard from the Silk Road is scheduled. During his campaign, Trump expressed his intention for the US government to acquire these 197K Bitcoins, along with any strategic Bitcoin reserve that already exists.

The price of Bitcoin saw increased selling activity, as US Bitcoin ETF providers collectively withdrew approximately $582 million from their funds. Specifically, Fidelity’s Bitcoin Trust (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT) recorded net outflows of around $258 million and $124 million respectively.

Market Outlook

It’s not surprising that Bitcoin experienced a correction recently, given its significant increase over the final two months of 2024. In fact, this kind of correction has occurred before – in January of both 2017 and 2021. However, following these corrections, Bitcoin went on to have a spectacular rally in the ensuing months.

In the upcoming months, the shift in U.S. administration towards a pro-cryptocurrency stance is expected to influence Bitcoin’s price dynamics substantially. Furthermore, there has been an increase in corporate investment in Bitcoin, which can be attributed to the successes of companies like MicroStrategy Inc (NASDAQ: MSTR) and Bitcoin ETF issuers over the past year.

As a researcher, I’ve noticed an increasing trend among nation-states exploring Bitcoin as a safeguard against inflation, particularly in the wake of El Salvador’s GDP growth. This interest is likely to reduce the supply of Bitcoin on centralized exchanges, given that institutional investors are hastening their accumulation rate.

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2025-01-09 14:13