The US government transferred nearly 30,000 BTC, and BTC rose above 70,000 before diving

2024-07-30 11:06

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Original title: "The US government transferred $2 billion in BTC, and BTC plunged in response"

Original author: Mary Liu, BitpushNews

The crypto market got off to a hot start on Monday morning, with Bitcoin soaring to $70,000 for the first time since mid-June.

U.S. presidential candidate Donald Trump spoke at a Bitcoin conference over the weekend, saying that if re-elected president, he intends to use BTC as a strategic reserve asset, and independent presidential candidate Robert F. Kennedy Jr. made similar remarks.

Bitcoin briefly retreated to $66,650 after Trump's speech, but bullish forces revived early Monday, pushing BTC to the $70,000 resistance level, and market sentiment rose, but BTC then fell back below the $67,000 support level, falling to an intraday low of $66,393 after midday. As of press time, Bitcoin is trading at $67,277, down 1.2% in 24 hours.

Altcoin trading was mixed, with the top 200 tokens by market capitalization seeing mixed gains and losses.

Book of Meme (BOME) led the gains, up 13.4%, followed by Bitcoin SV (BSV) up 11.9% and Convex Finance (CVX) up 11.6%. Wormhole led the decline, down 6.3%, while SATS (1000SATS) fell 5.1% and Safe (SAFE) fell 4.9%.

Currently, the overall market value of cryptocurrencies is $2.41 trillion, with Bitcoin accounting for 55.1% of the market.

Before the release of important news such as the Federal Reserve's interest rate decision, the U.S. employment report and the earnings reports of large technology companies this week, U.S. stocks also fluctuated. At the close, the S&P 500 and Nasdaq 500 rose 0.08% and 0.07% respectively, while the Dow Jones fell 0.12%.

Analysts at Secure Digital Markets said: "This week's reports will be critical in determining whether tech stocks and crypto assets can rebound. Earnings to watch include PayPal, AMD and Microsoft on Tuesday; Meta on Wednesday; and Amazon, Apple and Coinbase on Thursday."

Although the Federal Reserve is expected to keep interest rates unchanged on Wednesday, many market observers believe that Fed Chairman Powell will lay the groundwork for a September rate cut in a follow-up speech, and Wall Street currently believes that the probability of a September rate cut is 100%.

The US government transfers $2 billion in "Silk Road" tokens

According to on-chain data shared by Arkham Intelligence, the US government's transfer of BTC may be the reason for the market's brief sell-off.

Arkham Intelligence's blockchain data shows that a wallet marked "US Government: Silk Road Department of Justice" transferred 29,800 BTC to an unmarked address with no previous transaction history. The address then forwarded 19,800 BTC and 10,000 BTC to two different addresses.

Arkham analysts predict that one of the transfers of 10,000 BTC worth $670 million is a deposit to an institutional custodian or service institution.

On-chain analyst @ai_9684xtpa posted on the X platform that the address transferred by the US government this time was used to store some of the tokens seized by Silk Road in November 2020 (a total of 69,369 tokens). The last operation was four months ago. This operation may be for sale, or it may just be a regular fund transfer, because there was also a wallet fund transfer operation on April 2. How the follow-up situation will continue to be observed.

Trading sideways at key resistance levels

Bitfinex analysts said: "BTC encountered strong upward resistance in the $68,000-69,000 area and withstood a 7.24% intra-week pullback. As the accumulation trend in the spot market continues, we expect the $68,000-69,000 level to continue to act as resistance and expect it to fluctuate around these levels or fall slightly."

Bitfinex data shows that last week, the implied volatility of BTC options initially surged to a 4-month high of 68.6%, and then declined as most swing/position traders reduced risk ahead of the Nashville conference. There was a brief spike in realized volatility over the weekend and during the Bitcoin conference, but implied volatility continued to fall sharply, which is consistent with typical behavior before option expiration, especially in the absence of major upcoming events or catalysts.

Bitfinex said: "We believe that this activity in the options market is driven by some risk reduction in short-term call and put options as the market digests short-term catalysts such as the launch of the Ethereum ETF and the Nashville conference. Another key influencing factor is the monthly expiration date on August 2. Although the net open interest of this contract has a notional value of approximately US$2.2 billion, its time value decreases as the expiration date approaches, which generally leads to a decline in implied volatility."

Analysts predict: "Looking ahead, the market will adjust as the monthly contract expires this weekend. We expect implied volatility may face further downward pressure. The decline in implied volatility may cause Bitcoin to stagnate or even fall a little from the $68,000-69,000 resistance area."

TradingView analyst TradingShot pointed out that Bitfinex The highlighted resistance zone is aligned with Bitcoin’s “parabolic growth channel”, which suggests that Bitcoin will rise sharply once this resistance zone is overcome.

TradingShot said: “Bitcoin is about to end July with a strong test of its historic parabolic growth channel, the area that marks its cyclical bottom and is also the area recommended for buying after the bear cycle. This marks the 5th consecutive month of sideways trading, as shown in this 1M chart. This is a behavioral pattern that usually occurs before BTC begins the most intense part of the bull cycle, the "parabolic rally."

TradingShot concluded: “Before this, of course, there is the accumulation phase within the parabolic growth channel. We have been past this stage for a few months, and according to the time cycle, the market has just entered the (green) zone and the parabolic rally may start at any time.”