Cryptocurrency analysts predicted how the large-scale sale of cryptocurrency by the German government will affect the value of bitcoin

The German government has made a large-scale sale of bitcoins, which has caused significant fluctuations in the cryptocurrency market. According to Arkham Intelligence, on July 8, more than 2,700 BTC were sent from an address associated with the German Federal Criminal Police Office (BKA) to Kraken, Cumberland, and other exchanges.

In a few hours, the German government transferred 1,533 BTC worth $ 87.6 million to Cumberland and other addresses. Later, another 8100 BTC worth $ 463.2 million were sent from the BKA address to cryptocurrency exchanges and market makers, including $ 200 million to Flow Traders. In total, the German government sold 16,000 BTC in one day. However, 3,623 BTC came back from Kraken, Bitstamp, and Coinbase, which may be due to the unsuccessful sale of these assets on exchanges.

Analysts note that this sale is not significant compared to the total liquidity of the bitcoin market, but it has caused excitement among traders. Kee Young Yu, founder and CEO of CryptoQuant, believes that the bitcoin market is heavily dependent on «psychological operations.» He also noted that the crypto community still blames government sales of bitcoins for the drop in quotes.

Crypto trader Alex Krueger has estimated that the sale of the remaining bitcoins by the German government could lead to a 10.5% drop in the asset’s price. According to him, the market will be able to absorb such a drawdown in one go, similar to the expected drop from the sale of BTC by Mt. Gox creditors.