Analysis: The market has overreacted to the U.S. government's sale of Bitcoin

ChainCatcher news, according to Cointelegraph, due to today's transfer of Bitcoin by the U.S. government, selling pressure has increased, causing Bitcoin prices to drop further. Axel Adler Jr., a contributor at the on-chain analytics platform CryptoQuant, stated that large market participants are dominating the risk-off reaction to the latest transfers by "selling the news." He pointed out, "Whenever Arkham posts news about currency trends on Twitter, shorts immediately start selling the market. The sale of 10,000 Bitcoins by the U.S. government will have no impact, but the fact itself will provoke such a reaction."

According to data from the crypto intelligence company Arkham, the largest batch of confiscated cryptocurrency by the U.S. government this year, totaling 10,000 BTC (worth $581 million), was transferred to Coinbase for trading. This event offset any positive effects brought by changes in the U.S. macroeconomy, such as the Consumer Price Index (CPI) failing to boost Bitcoin prices. The analytics platform Lookonchain shows that the Bitcoin transfers by the U.S. government in 2024 have repeatedly triggered mimetic reactions in the market. This year, the U.S. government transferred 15,940 BTC, worth $966.4 million, to Coinbase Prime through three transactions. In the three days following the first two transfers, Bitcoin prices dropped by about 5%.