- Bitcoin losses are around the $60,000 price range and succumbing to selling pressure.
- US government moved 10,000 BTC, fueling FUD, but it may not sell.
Bitcoin (BTC) has fallen back lower after a brief move above the $60,000 price range. As a result, investors were more curious about the risks of a potential further decline towards the weekend.
Bitcoin has hit lower highs since hitting an ATH in March.
Bullish expectations were high after the crash in early August, but weak demand has eroded weak market confidence and recovery expectations.
In the latest turn of events, the price of BTC has once again fallen below $60,000. This comes as reports indicate that the US government has recently moved 10,000 BTC to Coinbase Prime.
The move contributed to the return of doubt among Bitcoin holders. The amount of BTC transferred was almost similar to the amount sold by the German government in July.
A result that led to significant selling pressure.
Is the government selling Bitcoin?
It is possible that the US government is selling bitcoins, but recent results do not necessarily indicate this. The transfer may have been made for custody reasons.
The U.S. Department of Justice has selected Coinbase Prime to provide custody services.
Still, the announcement may have added to an already volatile situation. It comes as Bitcoin failed to break above $61,900.
The cryptocurrency could soon overcome this short-term selling pressure as optimism returns to the market.
Economic data released this week suggest the Fed may intervene soon. Among them, the consumer price index (CPI), which came in lower than expected.
This means that the Federal Reserve will most likely cut interest rate in September.
Rate cuts are seen as beneficial for risk assets like Bitcoin as they open the door to access liquidity. But ahead of that, the market has been cautious due to the growing risk of further declines.
This is also evident in the amount of BTC on exchanges.
Bitcoin exchange reserves have been steadily declining this year. However, they have recently stabilized and even seen some inflows.
Current outlook suggests that foreign exchange reserves could trend in favour of a more marked increase.
Source: CryptoQuant
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An upward trend change in the amount of Bitcoin exchange reserves would support the idea that selling pressure is gaining ground. This would confirm Bitcoin’s possible move towards $50,000.
However, if the downward trend continues, it will lead to a supply crisis.
