Bitcoin (BTC) Price Forecast: German Bitcoin Sales and Dormant Whale Activity Impact Price

Despite recent employment data raising the chance of a Fed rate cut in September, Bitcoin (BTC), the world’s oldest and most valuable cryptocurrency, has continued its downward trend, opening the new week bearishly.

It dropped to around $55,529, hitting an intraday low of $54,424. The decline can be attributed partly to news that the German government has executed a significant crypto transfer.

According to blockchain analytics platform Lookonchain, Germany transferred an additional 700 Bitcoins just hours ago, increasing market supply and signaling potential large-scale sell-offs. This development spooked investors, reducing demand and exerting downward pressure on BTC prices.

Another factor affecting BTC’s price is the movement of $8 million worth of BTC by a dormant whale. This Bitcoin address, inactive for a decade, recently became active, holding 140 BTC originally valued at $107,000 in 2013.

Impact of German Government Bitcoin Sales on Market Dynamics

Recently, the German government has been active in the cryptocurrency market by selling off a large amount of Bitcoin. They recently transferred 700 Bitcoins, part of a larger sell-off totaling about $819 million worth of Bitcoin. This action started when German authorities seized 50,000 Bitcoins in 2013 from a website that shared pirated movies. Despite arguments that Bitcoin could protect against inflation and boost innovation, the government has continued to sell. This selling could impact the cryptocurrency market by adding more supply, potentially affecting Bitcoin’s value.

Therefore, the ongoing sale of Bitcoin by the German government, sourced from seized assets like Movie2k.to‘s 50,000 Bitcoins, increases market supply, exerting downward pressure on BTC’s price.

Impact of Dormant Bitcoin Address Activation on Market Speculation

On the other side, a Bitcoin address holding 140 BTC, valued at over $8 million today, has emerged after a decade of dormancy. Known as “1BLoHu,” it received 140 BTC in 2013, worth about $107,000 then, from another address “1aWmn.” Recently, “1aWmn” transferred these 140 BTC to a new address, “bc1q66,” sparking speculation about the owner’s motives.

Some believe this transfer signifies the owner’s decision to capitalize on the significant growth of their investment. Others suggest it may be a strategic move to leverage improved blockchain technology and security features associated with the shift from traditional “1” addresses to newer “bc1” addresses. This transition is known to enhance both security and transaction efficiency, further intriguing the Bitcoin community.

Therefore, the sudden movement of $8 million worth of Bitcoin from a long-dormant address could affect Bitcoin’s price, as it sparks interest and speculation among investors, leading to short-term price fluctuations.

Impact of US Economic Speculation on Bitcoin Prices

On the US front, the broad-based US dollar struggled to gain traction and remained under pressure amid growing speculation that the Federal Reserve might cut interest rates in the third quarter. This speculation could help limit losses for Bitcoin. Recent employment data have increased the likelihood of a rate cut in September, with markets now pricing in a 77% chance, up from 70% before the latest report.

Traders are closely watching Federal Reserve Chair Jerome Powell’s upcoming testimony on Tuesday, followed by the US June Consumer Price Index (CPI) inflation data on Thursday, for further guidance.

On the data front, US Nonfarm Payrolls increased by 206,000 in June, following a revised 218,000 rise in May (initially reported as 272,000). This exceeded the expected 190,000. The Unemployment Rate edged up to 4.1% from May’s 4%. Average Hourly Earnings, a measure of wage inflation, fell to 3.9% year-over-year in June from 4.1% in May, aligning with market predictions.

Therefore, the likelihood of US interest rate cuts following positive employment data may support Bitcoin prices by weakening the dollar. Investors await Federal Reserve signals from Powell’s testimony and CPI data for further market direction.

BTC/USD Price Prediction: Technical Outlook

Bitcoin is currently trading at $55,430, down 0.70%. The 4-hour chart reveals key price levels and technical indicators that investors should monitor closely. The pivot point is set at $55,180, marking a critical threshold for potential bullish or bearish movements.

Immediate resistance levels are identified at $56,980, $58,420, and $60,220. Breaking through these levels could signal further upward momentum. Conversely, support levels are found at $53,140, $51,720, and $49,910. A break below these support points could trigger a significant selling trend.

The Relative Strength Index (RSI) stands at 35, indicating that Bitcoin is approaching oversold territory. The 50-day Exponential Moving Average (EMA) is positioned at $58,580, suggesting that maintaining a price above the pivot point is crucial for sustaining bullish sentiment.