Governments Offloading Crypto Holdings: Not the Main Culprit

In recent days, we've witnessed the German government consistently liquidating its Bitcoin holdings through popular exchanges like Coinbase and Kraken. On June 26th, the U.S. government joined in, moving a total of 4,000 Bitcoins to Coinbase Prime. This led to a 1.5% drop in Bitcoin's price, slipping below $61,000.

However, according to CryptoQuant's CEO, Ki Young Ju, this government selling is merely "plain FUD" and not the real reason behind the BTC price decline. Ju explained that Coinbase Prime has the capacity to handle substantial liquidity, ranging from 20,000 to 49,000 BTC during periods of high spot ETF inflows, and 6,000 to 15,000 BTC even on low inflows. Therefore, the 4,000 BTC sale by the U.S. government is unlikely to have a significant impact on the market.

Earlier this year, in April, the U.S. government had transferred 30,175 BTC, valued at $2 billion, to the same Coinbase wallet. Similarly, the German government has moved over 2,200 BTCs in the past seven days, but its Bitcoin holdings have substantially appreciated, now valued at $2.76 billion with $1.1 billion in unrealized profit.

Miner Capitulation: The Real Culprit Behind BTC Price Correction

The recent BTC price correction has been primarily due to miner capitulation, as miners have been struggling to maintain their operations after the recent Bitcoin halving event. As a result, these miners have been net sellers in the market, putting additional selling pressure on Bitcoin.

At the time of writing, Bitcoin is trading 1.5% down at $60,630, with a market cap of under $1.2 trillion. Over the last week, Bitcoin has lost more than $100 billion in market capitalization.

In conclusion, while the government's Bitcoin sales have garnered attention, the CryptoQuant CEO's analysis suggests that these sales are not the primary driver behind the recent BTC price correction. The real culprit appears to be the miner capitulation, as they grapple with the aftermath of the Bitcoin halving event.