- Rumor has it that the US government liquidated a sizeable portion of its Mt. Gox Bitcoin holding leading to a strong price correction.
- Bitcoin continues to receive support from US lawmakers who have added the crypto during this correction period.
After a healthy jump to $30,000, the Bitcoin (BTC) price dropped all the way to $27,000 as reports emerged that the US government has been liquidating a significant portion of its Mt. Gox Bitcoin (BTC) holdings. This led to a sudden increase in the selling pressure on Bitcoin which led to greater volatility and impacted market stability.
During this year in 2023, the average daily selling pressure based on crypto exchange inflows has been around 28,800 BTC per day. Popular Twitter handle for crypto @MitchellHODL explains that if the US government dumps one-third of its total held Bitcoins, it increases the daily selling pressure by 48 percent.
Word on the street is that this afternoon's dump is the US govt (stupidly) liquidating a bag of Mt. Gox #BTC.
Average daily sell pressure in 2023 based on exchange inflows has been ~28,800 BTC per day.
US Govt dumping 1/3 of their remaining 41,500 BTC would increase daily sell… pic.twitter.com/Uw3RS80dU6
— Mitchell 🇺🇸🚀 (@MitchellHODL) April 26, 2023
The actual reason behind the US government liquidating these cryptocurrencies remains unclear. However, the recent price surge in Bitcoin provides a good opportunity, especially for long-term holders, to liquidate their crypto holdings.
Over the last 24 hours, the Bitcoin price has shown strong volatility of nearly $3,000 oscillating in the price range between $27,000 and $30,000. After yesterday’s price drop, the BTC price has recovered significantly. As of press time, Bitcoin is trading 2 percent up moving closer to $29,000 once again. Speaking to Bloomberg, Stefan von Haenisch, head of sales trading at OSL SG Pte in Singapore said:
We’re seeing short positions getting liquidated into a market that exhibits thin order books, pushing up the Bitcoin price.
Many market analysts also believe that the recent crisis at the First Republic Bank has served as a catalyst to the Bitcoin price rally. Thus, Bitcoin is emerging as a hedge to the financial cracks in the traditional banking market.
What’s next for Bitcoin?
Amid its strong performance, market analysts have shared bullish price predictions for Bitcoin (BTC) from here onwards. Popular market analyst Michael Van de Poppe notes that as far as the Bitcoin (BTC) price sustains above $27,800, it can continue its rally further to $30,000, and eventually all the way to $40,000. In one of his recent tweets, Poppe said:
Bitcoin did continue to hold the box at $27,000 and broke above the crucial breaker of $27,800 -> back in the range. Next resistance is $28,800. If we’ll have a slight consolidation, it seems likely that we’ll continue moving upwards to $30,000.
The good thing is that Bitcoin, nowadays, is also receiving endorsements from American lawmakers. In her recent interview, US Senator from Wyoming Cynthia Lummis called Bitcoin a “freedom” asset and that it will stand the test of time. Interestingly, she also stated that she’s opposed to the idea of having a US CBDC.
Another US senator Tedd Cruz stated that he’s incredibly bullish on Bitcoin and owns a little less than 2 BTC. He added that he continues to buy Bitcoin every Monday and has been adding a little quantity every Monday.
JUST IN – 🇺🇸 U.S. Senator Ted Cruz: "I am incredibly bullish on #Bitcoin specifically."
"I own a little more than 2 bitcoin, and every Monday I own a little bit more. I bought the dip." 👏 pic.twitter.com/6K269xaBjZ
— Bitcoin Magazine (@BitcoinMagazine) April 26, 2023