Typically, large institutions prefer OTC trading to minimize market impact.
On-chain analytics platform Spot On Chain has reported notable Bitcoin transactions by the German government, sparking discussions about a potential shift towards over-the-counter (OTC) sales.
The report indicates that the German government transferred 19,521.7 BTC ($1.14 billion) to wallets probably owned by market makers B2C2, Flow Traders, and Cumberland, potentially for an over-the-counter (OTC) transaction. Subsequently, they received 7,106 BTC ($412 million) back, primarily from centralized exchanges (CEXs) at a reduced price, suggesting a possible strategic shift. As of now, the German government retains 27,461 BTC ($1.55 billion), having liquidated almost half the Bitcoin holdings initially slated for sale.
Typically, large institutions prefer OTC trading to minimize market impact. However, the German government opted for exchanges, causing significant market turbulence and price drops. Spot On Chain suggests that the German government may now be acknowledging the drawbacks of this approach and is shifting focus towards OTC sales directly to market makers.
Market Impact and Price Decline of Bitcoin Sell-Offs
Since June, Bitcoin’s price decline has been partly linked to the German government’s sale of around $2 billion worth of Bitcoin seized from Movie2k.to operators. This sell-off started on June 18, 2024. On July 5, Bitcoin’s price dropped below the critical $54,000 support level but has since recovered to $57,683.
Although the German government’s transactions are relatively minor compared to Bitcoin’s daily trading volume of $36 billion, they have significantly impacted market sentiment. Frequent news reports on these movements have heightened market anxiety, potentially affecting prices as market makers respond to the information.
Spot On Chain’s Bitcoin Price Predictions
Spot On Chain has recently unveiled their Bitcoin price predictions, leveraging Vertex AI from Google Cloud for advanced modeling. In the short term, spanning from May to July 2024, Bitcoin’s price is anticipated to fluctuate between $56,000 and $70,000. This period is expected to be marked by potential volatility, with a notable 48% probability of prices falling below $60,000.
Looking ahead to the second half of 2024, Spot On Chain projects a bullish trend, forecasting a 63% likelihood of Bitcoin reaching $100,000. This positive outlook is bolstered by anticipated rate cuts initiated by the Federal Open Market Committee (FOMC) in December 2023, aiming to lower the federal funds rate to 4.6%. Such monetary policy adjustments are anticipated to enhance demand for high-risk assets such as Bitcoin.
Moving into the first half of 2025, Spot On Chain predicts a strong probability (42%) of Bitcoin surpassing the $150,000 threshold, with this likelihood rising to 70% for the entire year. These projections underscore a favorable long-term outlook, supported by evolving market trends and investor confidence in Bitcoin’s role as a valuable asset class.
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