Bitcoin Price Slides After Government Moves Seized Coins
The cryptocurrency market experienced a downturn on Wednesday, with leading currencies like Bitcoin and Ethereum facing losses. This decline followed the U.S. government's transfer of $593 million worth of Bitcoin, seized from the Silk Road incident, out of its wallets.
Earlier in the day, Bitcoin had rallied to $61,670 after the release of cooler-than-expected July consumer price index (CPI) data. However, the positive momentum was short-lived as the news of the government's Bitcoin movement triggered a sell-off, pushing the price down. Despite a 5.45% weekly gain, Bitcoin has not fully recovered from the losses incurred earlier this month due to recession fears.
Ethereum followed a similar trajectory, reaching $2,770 before retracing to the $2,600 region. The total cryptocurrency liquidation in the past 24 hours reached $121 million, with long liquidations accounting for 73% of the total.
The market sentiment remained fearful, according to the Cryptocurrency Fear & Greed Index, indicating significant selling pressure. The global cryptocurrency market capitalization stood at $2.09 trillion, shrinking by 1.90% in the last 24 hours.
Meanwhile, stock markets witnessed gains on Thursday, fueled by the favorable inflation data. The Dow Jones Industrial Average rose 0.61%, the S&P 500 gained 0.38%, and the Nasdaq Composite added 0.03%.
Analysts believe that the possibility of a rate cut by the Federal Reserve is approaching, which could lead to upward price action for Bitcoin. However, Bitcoin bulls face stiff resistance at the $61,700 level, and the price continues to oscillate between the late June and early July wedge highs.