Perhaps the market’s fears of potential selling pressure from the Silk Road sell-off have outweighed: Van Straten

To the outside world, Bitcoin (BTC)’s fall from $10,000 to $92,000 in a matter of days may signal the end of the bull run. A caveat to this is that Bitcoin may consolidate below the key psychological $100,000 threshold.

Unconfirmed reports by DB News Recommends that the Department of Justice (DOJ) be authorized to liquidate 69,370 BTC ($6.5 billion) seized from the Silk Road marketplace.

The report comes 11 days before the inauguration of President-elect Donald Trump. According to Glassnode, Trump has pledged not to sell any of the 187,236 BTC held by the US government. Most government-owned tokens come from takeovers at Bitfinex and Silk Road.

There are a few reasons why the selling risk may be overstated: There seem to be a lot of reports of 69,370 BTC being liquidated, and if they are sold, they will be sold in an orderly fashion because that is the best possible price from them. At the same time, the market already knew this was a possibility, so it may have already been baked into the market’s expectations.

Second, the market has absorbed more than 1 million bitcoins since September. This may be indicated by the decrease in the holdings of long-term holders, defined by Glassnode as investors who have held bitcoin for more than 155 days. As a cohort, they now hold 13.1 million BTC. However, since September, the price has gone from about $60,000 to over $100,000.

The last reason is that we have previous data on another government selling a similar amount of bitcoin. The German government sold approximately 50,000 BTC between mid-June and mid-July 2023. The total value of the coins at the time was around $3.5 billion, about half of their current value.

However, the market effectively sold off and the price fell to around $55,000 on July 7, while the German government still held at least 25,000 BTC. Which bitcoin shows this amount does not dictate the market.