Bitcoin faced significant selling pressure after the Wall Street opening on July 29, leading to a sharp decline in its price.
The cryptocurrency dropped by 4.5%, falling below $67,000, after initially reaching $70,000 for the first time in nearly two months.
The sudden dip was triggered by a transfer from a US government wallet containing approximately $2 billion worth of Bitcoin.
This movement raised concerns about a potential over-the-counter (OTC) auction, which typically precedes a significant sell-off.
“Transfer went to a fresh wallet by looks of it which typically is the precursor of OTC related auctions,” explained popular trader Skew, based on data from crypto intelligence firm Arkham.
The transaction led to immediate profit-taking, causing a wave of selling that prevented Bitcoin from sustaining its $70,000 level.
This price point is crucial, as it marks a significant psychological threshold and was previously an all-time high in 2021.
Charles Edwards, founder of Capriole Investments, expressed frustration over the recurring impact of government distributions on Bitcoin’s price, noting a pattern of state actions disrupting the cryptocurrency’s upward trends.
Monitoring resources like CoinGlass indicated that the liquidity above $69,000 remained untouched, while the price dipped to capture liquidity below this level.
Analysts like Skew and traders like Josh Rager and CrypNuevo noted the potential for further downside if the market couldn’t stabilize.
Rager warned that a series of lower highs could indicate longer-term bearish trends.
CrypNuevo highlighted the possibility of choppy price action leading up to the Federal Reserve’s meeting on interest rates, emphasizing the cautious stance of major market players.
