On Wednesday, the cryptocurrency market experienced a wave of volatility when news broke that the US government had transferred a significant amount of bitcoin seized from the infamous Silk Road marketplace to the Coinbase exchange.
Massive bitcoin influx from Silk Road to Coinbase
x.com/ArkhamIntel/status/1823755773987500286″ target=”_blank” rel=”nofollow”>According According to on-chain data tracker Arkham, the US government recently moved 10,000 bitcoin worth around $590 million from a known government wallet to a Coinbase Prime deposit address.
Notably, this transfer triggered a 3.3% drop in the price of bitcoin, which fell below the key support level of $60,000 to trade around $59,130 at the time of writing.
However, it is important to note that the government's selection of the United States Coinbase as a custodian of your confiscated digital assets can only occasionally lead to an immediate sale.
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As reported Per Bitcoinist, Coinbase announced that the US Department of Justice’s asset forfeiture division, the US Marshals Service, had selected Coinbase Prime to offer custody and advanced trading services for its “Class 1” digital assets.
This partnership aims to streamline the custody, management and disposal processes for cryptocurrency assets, allowing for the diversification of the types of digital assets that can be managed and disposed of under government forfeiture programs.
Ultimately, this may result in the exchange holding this large amount of btc and not affecting the price of bitcoin in the short term or contributing to selling pressure unless there is a change from the previous price. movements and the authorities decide to liquidate the tokens.
Critical resistance levels and support thresholds
In a recent analysis of bitcoin's current price action, cryptocurrency analyst Daan crypto Trades recently highlighted key levels keep an eye out for a possible continuation of btc’s recovery over the past seven days after dropping towards $59,000 on August 5.
The first analyst x.com/DaanCrypto/status/1823449696053887369″ target=”_blank” rel=”nofollow”>noted that bitcoin is at a crucial point where it needs to break above the 200-day exponential moving average (EMA) at $59,468 and the 200-day moving average (MA) at $62,274.
Daan crypto Trades explains that these levels are key to catalyzing favorable medium- to long-term dynamics in favor of the bulls. However, the cryptocurrency has struggled to meet this challenge and failed to consolidate above these levels last week.
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Given this scenario, the analyst has identified two important resistance levels that the btc Price Should be held if a possible correction is looming.
Daan crypto Trades underlines the importance of monitoring around the $56,530 mark on the btc/USDT daily chart, emphasizing its role as a crucial critical floor to prevent a drop that could mirror the significant 20% correction observed in early August.
Furthermore, the analyst points to the $52,990 threshold as the subsequent support level to monitor if bitcoin falters at the aforementioned mark, especially if selling pressure intensifies, putting downward pressure on its price trajectory.
Featured image of DALL-E, chart from TradingView.com
