The Bitcoin price underwent significant volatility as the US and German governments executed transactions involving seized Bitcoin (BTC) holdings, triggering another downturn in BTC value.

According to market intelligence from Arkham, the US government transferred approximately 4,000 BTC seized from drug trafficker Banmeet Singh to Coinbase. Simultaneously, the German government conducted substantial Bitcoin liquidations, selling about 2,786 BTC early Wednesday.

Bitcoin Price Prepares for Potential Impact

Earlier reports by Bitcoinist detailed Banmeet Singh's guilty plea in January for charges related to drug trafficking and money laundering. Singh's operations reportedly facilitated the sale of controlled substances through dark web platforms like Silk Road 1, Silk Road 2, Alpha Bay, and Hansa.

The US government deposited 3,940 BTC, valued at $241.22 million at current rates, into Coinbase. While transferring to a centralized exchange (CEX) often implies selling, it's noteworthy that Coinbase also provides custodial services for large institutional investors. This suggests the possibility of the confiscated BTC being placed in Coinbase custody, potentially mitigating impacts on Bitcoin price recovery.

However, if the BTC is sold, the recent influx to Coinbase, coupled with expected movements of Mt. Gox BTC in early July, could affect the market. Market expert Adam Cochran suggests a gradual auctioning process via Coinbase, which might alleviate potential negative market effects.

German Government Joins in Bitcoin Liquidation

Alongside US actions, the German Federal Criminal Police Office (BKA) executed nine transactions involving 2,786 BTC. This follows Bitcoin's recent 20% correction, dropping from a brief recovery at $62,400 to $61,000.

Despite uncertainties from government liquidations, technical analysis by Mags highlights historical bull market support bands as robust indicators. These bands historically provided reliable support and resistance during bull cycles, with recent tests suggesting potential for bullish continuation despite ongoing market volatility.

The current Bitcoin price stands at $61,000, reflecting a nearly 13% decline over the past month.