Bitcoin Faces Pressure as U.S. Government Transfers $2 Billion in BTC

Bitcoin Market Update: BTC Faces Pressure After U.S. Wallet Movement

Bitcoin (BTC) approached the $66,000 mark early on Tuesday, losing all the gains it accumulated last week. This decline was largely influenced by the recent movement of a substantial amount of BTC from wallets associated with the U.S. government, raising concerns among traders about potential selling pressure on the horizon. In the past 24 hours, BTC experienced a dip of up to 5% before making a slight recovery.

According to tracking service Arkham, the U.S. Marshals Service has transferred $2 billion worth of BTC into two new wallets, with speculation that at least one of these wallets could be tied to a custodial service. This situation has left many in the market apprehensive about the implications of such large-scale transfers.

In the wider market, Solana’s SOL token faced significant losses, plunging 6% and reversing the gains it made on Monday. The recent surge in token prices can be attributed to a spike in memecoin trading activity on the Solana network over the past weekend, which resulted in on-chain trading volumes surpassing those on Ethereum, the traditional market leader.

Other major cryptocurrencies followed suit with declines. Cardano’s ADA fell by 5%, while dogecoin (DOGE) and BNB Chain’s BNB both dropped by 4%. XRP also saw a decrease of 3%. Interestingly, Ether demonstrated relative resilience, with only a 1% decline, despite the newly launched spot ETH exchange-traded funds (ETFs) experiencing $97 million in net outflows on Monday, marking their fourth consecutive day of losses.

Expert Analysis: Caution in the Market

Market analysts are warning that macroeconomic factors, coupled with the absence of new catalysts, may hinder price growth in the near future. “Last week, the market received a temporary boost due to anticipation surrounding Donald Trump’s speech at the Nashville Conference, where he was expected to endorse Bitcoin as a strategic reserve asset,” noted Alice Liu, research lead at CoinMarketCap, in an email to CoinDesk.

During his speech at the annual Bitcoin 2024 conference in Nashville, Republican candidate Donald Trump promised to dismiss SEC chair Gary Gensler if elected and proposed the establishment of a strategic Bitcoin reserve. He emphasized his commitment to being a “pro-Bitcoin” president and assured that none of the 213,239 BTC seized by authorities and currently held in U.S. government wallets would be sold. Trump further declared his vision for the U.S. to become the world’s leading cryptocurrency hub.

Despite these optimistic sentiments, Liu remarked that the initial excitement peaked on the 27th, leading to a typical “sell the news” scenario. She emphasized that “there is currently a lack of fresh optimism in the market.” Furthermore, Liu warned that interest rate decisions from three major central banks—the Bank of Japan, the Federal Reserve, and the Bank of England—scheduled for Wednesday and Thursday could heighten volatility in the cryptocurrency market.