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Bitcoin (CRYPTO: BTC) has been weighed down by Germany liquidating Bitcoin holdings, but fresh analysis points to further downside being limited.
What Happened: Economist and crypto trader Alex Krüger pointed out that Germany's equivalent of the FBI held 50,000 Bitcoin until late June. While they have been continuously selling in small parts since June 19, on July 8 they moved 16,038 BTC to brokers and exchanges, taking their total balance to 23,788 BTC.
Krüger highlighted that the single-day offload moved Bitcoin prices by -3.5%.
Also Read: Impact Of Mt Gox, Germany Sales On Bitcoin: ‘Lettuce Hands Are Flushed Out’
He analyzed the Mt. Gox repayments, and Germany selling and calculated a maximum retrace of 10.5%, which he believes the market can absorb.
While Mt. Gox has a total of 141,000 to be distributed, around 95,000 will be distributed within 90 days. From these 95,000 BTC, 20,000 BTC will be going to credit funds, 10,000 BTC will go to a New Zealand exchange and the remaining to individual creditors.
Based on some assumptions, such as 30% of 85,000 BTC getting sold and then Gox creditors selling that 30% in one scoop, Germany selling its entire remaining stack would lead to a maximum drawdown of 10.5%.
Crypto trader Bluntz commented on Krüger's analysis that the "Germany selling has got to be long-term bullish for BTC."
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image created using artificial intelligence with Midjourney.
Posted In: $BTC
