by Bitcoin Dips Amid Silk Road BTC Movements
Bitcoin (BTC) inched closer to the $66,000 mark early Tuesday, erasing all gains from the previous week. The sentiment in the market has been shaken due to a significant transfer of Bitcoin from U.S. government-linked wallets, raising concerns about potential selling pressure among traders. Within 24 hours, BTC experienced a decline of up to 5% before showing signs of recovery.
U.S. Marshals Shift $2 Billion in BTC
The U.S. Marshals Service recently moved approximately $2 billion worth of Bitcoin to two new wallets. Tracking service Arkham has suggested that at least one of these wallets is likely a custodial service. This movement has contributed to the current bearish sentiment in the crypto market.
Solana Faces Major Losses
In the midst of Bitcoin’s decline, Solana’s SOL led the losses among major cryptocurrencies, plummeting by 6% and reversing the gains seen on Monday. Over the weekend, Solana’s token prices surged due to increased memecoin trading on the network, which saw on-chain trading volumes surpass those of Ethereum.
Other Major Cryptocurrencies Decline
Other major cryptocurrencies followed suit with similar losses. Cardano’s ADA saw a 5% drop, while Dogecoin (DOGE) and BNB Chain’s BNB fell by 4%. XRP, another significant player in the crypto space, experienced a 3% decline. Despite the overall downturn, Ether demonstrated relative strength with only a 1% decline, even as newly-launched spot ETH exchange-traded funds (ETFs) experienced $97 million in net outflows over the past four days.
Market Influences and Future Outlook
According to market observers, recent macroeconomic decisions and a lack of new catalysts could serve as headwinds, potentially pushing prices down in the short term. Alice Liu, research lead at CoinMarketCap, highlighted that the market had received a temporary boost last week from anticipation surrounding Donald Trump’s speech at the Nashville Conference, where he promised to support Bitcoin as a strategic reserve asset.
Political Promises and Market Sentiment
During the annual Bitcoin 2024 conference, Republican candidate Donald Trump pledged to fire SEC head Gary Gensler and create a strategic Bitcoin reserve if elected. He further stated he would be a “pro-Bitcoin” president and would prevent the sale of any of the 213,239 BTC seized by authorities and currently held in U.S. government wallets, claiming the U.S. could become the world’s cryptocurrency capital.
Optimism Peaks and Market Volatility
Despite the initial optimism surrounding Trump’s statements, Liu noted that enthusiasm peaked on the 27th, leading to a “sell the news” phase. She cautioned that the upcoming interest rate decisions from three central banks—the Bank of Japan, Federal Reserve, and Bank of England—could further increase volatility in the crypto market.
