The U.S. government is selling coins again? $2 billion worth of Bitcoin has been transferred, with 65,000 supporting "pressure mountain."

Author: Mary Liu, BitpushNews

On Tuesday, the cryptocurrency market continued its downward trend alongside the U.S. stock market. By the close of trading that day, the S&P 500 index, Dow Jones, and Nasdaq Composite all suffered significant losses, with the Dow dropping nearly 400 points, marking the worst quarterly start since 2020.

Rising borrowing costs have weakened the stock market's momentum, putting pressure on the S&P 500 index, as the yields on 10-year and 30-year U.S. Treasury bonds reached their highest levels since early November.

Bitcoin briefly fell below $65,000 on Tuesday, hitting a daily low of $64,591.50. By the close of U.S. markets, the price had slightly rebounded above $65,000, with the entire cryptocurrency market down 3.9% in the past 24 hours. Among major coins, Bitcoin (-5.68%), Ethereum (-6.43%), and Dogecoin (-10.33%) led the decline.

The meme coin sector plummeted about 17% in the past 24 hours.

U.S. Government Transfers Nearly $2 Billion Worth of Bitcoin to Coinbase, Raising Concerns of Selling Pressure

Market participants have been closely monitoring the U.S. government's Bitcoin address transfers, as any sales action could impact cryptocurrency prices. Typically, an increase in the amount of Bitcoin flowing into exchange wallet addresses raises selling pressure on the asset and triggers price declines.

Data from Arkham Intelligence shows that on April 2, 2024, the U.S. government executed a Bitcoin transfer involving nearly $2 billion, moving tokens to a Coinbase Prime address in several transactions. The transfer amounted to 30,174.70 BTC and was successfully processed at block height 837,413.

In recent years, the U.S. Department of Justice has accumulated a large amount of BTC through seizures related to cases such as Silk Road, the Bitfinex hack, and the James Zhong case. The last confirmed sale occurred in March 2023, when the government sold 9,861 Bitcoins related to Silk Road for $216 million after seizing approximately 50,000 Bitcoins at the end of 2022.

As of 1:10 PM ET on April 2, the U.S. government still holds 215,246 BTC (worth $14 billion) and 50,147 ETH (worth $163 million).

Bitcoin had already dropped significantly that day, and after the news broke, it fell further below $65,000, with a slight rebound thereafter.

Crypto analyst and commentator Phyrex commented on the X platform: "This inflow to exchanges is said to have already been executed, and now it's just a matter of delivery. If that's the case, we will see the delivery price and the choices of new holders."

Impact of Federal Reserve Rate Cut Expectations

Analysts indicate that changes in expectations surrounding the Federal Reserve's rate cut pace have left traders uneasy. According to data from CME Group, federal funds futures show a 40% chance that the Fed will maintain interest rates at current levels before June.

Yesterday, U.S. manufacturing data came in stronger than expected. However, a Federal Reserve official stated that three rate cuts in 2024 still seem reasonable.

Cleveland Fed President Loretta Mester stated on Tuesday that she continues to expect three rate cuts this year, as part of the quarterly economic forecast submitted at last month's Fed meeting (the same as in December last year), making Mester a slight majority among the 10 officials who expect at least three rate cuts this year. According to the most likely economic forecasts, 9 officials believe that two or fewer rate cuts would be appropriate.

Meanwhile, San Francisco Fed President Mary Daly stated that three rate cuts this year are a reasonable baseline scenario, and that three cuts are a forecast, not a commitment.

Bitcoin Price Must Hold Above $65,000

Crypto analyst Rekt Capital stated in an article on April 2 that Bitcoin failed to complete a retest after breaking through, and as the Bitcoin halving approaches, price movements will continue to slow.

Rekt noted: "Bitcoin failed to complete a retest after the breakout. Technically, before the new weekly candle closes, Bitcoin could still recover to around $69,000, its historical high." The analyst added that Bitcoin's price needs to hold above the weekly low of $65,600 to avoid further losses.

According to Coinglass data, if Bitcoin's price falls below the $65,000 mark, all long leveraged positions worth over $249 million across exchanges will be liquidated.

Technical analyst Lockridge Okoth stated that if Bitcoin's price drops below the 200-day exponential moving average (EMA) support level of $65,556 (which has been crucial since October), the decline could extend to the $60,800 level.

Conversely, if the 200-day moving average holds as support, Bitcoin's price will rebound upwards. A breakthrough above the $69,000 support level would indicate more buying orders, increasing the likelihood of further gains, with the first target being to reclaim the peak of $73,777, before having a chance to set new highs above the $74,000 range.

Andrey Stoychev, head of Nexo's institutional brokerage, stated that the adjustment in Bitcoin's price is mainly due to new users entering the Bitcoin market in the two months since the approval of the U.S. spot ETF. Stoychev expects a short-term adjustment in Bitcoin as new entrants look to invest.

He said: "The Bitcoin bull market has brought returns, with three of the first four cycles exceeding previous highs. Looking back at 2020, Bitcoin soared 250% within just four months after breaking its historical high, indicating that if history repeats in this cycle, Bitcoin's potential trajectory could reach $231,000."