Bitcoin (BTC) traders are being urged to stay calm and avoid impulsive decisions in response to recent government sell-offs. This advice comes from Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant, who downplayed the significance of these sales in a recent X (formerly Twitter) post.
Government Sell-Offs Are A Drop in the Bucket
Ki argues that the amount of Bitcoin being sold by governments globally pales in comparison to the massive inflows the cryptocurrency market has witnessed since the start of the current bull run. According to his estimates, while nearly $250 billion has flowed into the market since 2023, government-held Bitcoin that could potentially be sold totals less than $10 billion.
“Govt Bitcoin selling is overestimated,” Ki summarized. “[$224]B has flowed into this market since 2023. Government-seized BTC contributes about [$9]B to the realized cap.”
This perspective offers a much-needed counterpoint to the recent fear gripping the market, fueled by a combination of factors: sharp spot selling, ongoing government offloading, and transfers from wallets linked to the defunct Mt. Gox exchange.
The Fear is Overblown
Bitcoin’s price has been volatile, dipping to four-month lows of $53,500 on July 5th. However, Ki believes the “extreme fear” sentiment reflected in the Crypto Fear & Greed Index is unwarranted when considering the limited impact of government sales.
“It’s only 4% of the total cumulative realized value since 2023,” he explained. “Don’t let govt selling FUD ruin your trades.” (FUD stands for Fear, Uncertainty, and Doubt)
While market observers remain cautious, with some key long-term support levels potentially breached, Ki’s analysis offers a more optimistic outlook. He emphasizes that the current drawdown might be within historical norms.
Also Read: Mt. Gox Sell-Off: Will Bitcoin Crash? Experts Say Hold On
Long-Term Support Levels Remain in Play
Several key support levels could still hold for Bitcoin despite recent price drops. The Supertrend indicator suggests a floor around $52,000, while calculations also show a possibility of a revisit to $45,000 – a move that would align with historical drawdowns.
Classic bull market support levels, however, are currently well above the current price. These include the 200-day moving average and the short-term holder cost basis, which sit at $58,550 and $64,175, respectively.
As of July 6th, Bitcoin has recovered slightly from its recent lows, trading around $56,715. This price movement highlights the inherent volatility of the cryptocurrency market, but Ki’s analysis reminds investors to focus on long-term trends and avoid making rash decisions based on short-term fear.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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