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Effects of governments’ Bitcoin sell-offs are grossly exaggerated

In this post:

  • CryptoQuant CEO Ki Young Ju thinks the community is exaggerating the effect of Germany and US’s Bitcoin sell-offs on the market.
  • Young Ju explains that the governments’ BTC holdings have done nothing to shake Bitcoin’s realized market capital.
  • On-chain data supports his claim, showing heightened trading activity and strong potential for a bullish.

Investors and traders are struggling with the intense selling pressure Germany and America have triggered for Bitcoin. The crypto diva dipped by over 10% on weekly charts.

However, we’re now getting reports saying that the effects of these sell-offs are not as bad as the community is treating them. Ki Young Ju, renowned crypto analyst and CEO of CryptoQuant, says that the whole thing is grossly overestimated.

Government sell-offs are not a big deal

Observe Young Ju’s chart below. Bitcoin’s realized cap has been steadily increasing since the approval of spot Bitcoin ETFs. However, the seized BTC by the governments (US and Germany) is just a tiny portion of the overall realized cap.

Source: CryptoQuant

Sure, the recent large transfers have caused market panic and triggered a bearish momentum, but the uptick in realized cap remains largely unmoved.

“$224 billion has flowed into this market since 2023. Government-seized BTC contributes about $9B to the realized cap. It’s only 4% of the total cumulative realized value since 2023. Don’t let government selling FUD ruin your trades.”

Ki Young Ju

Young Ju explained that realized cap is a measure of the total capital that has entered the market. This is not like the traditional market cap that’s based on the current price multiplied by the total number of coins.

The realized cap considers the price of each coin when it last moved. Young Ju says this can be seen as the size of the “graveyard of exit liquidity victims,” which grows as profits are realized.

In a separate post, Young Ju says he believes the Bitcoin bull cycle will continue until early next year. He advises spot traders to dollar-cost average (DCA) but be aware that prices could drop to $47K.

He cautions against opening high-leverage long or short positions based on his tweets unless you are an experienced futures trader. The analyst added:

“Over the past month, I have indirectly warned against excessive risk, but it seems some people are still opening high-leverage long positions based on my tweets about the long-term cycle. My tweets are from a spot trading and long-term cycle perspective. Warnings about corrections are mentions of risk.”

Bitcoin’s on-chain data strengthens hope

On-chain data supports Young Ju’s long-term bullish outlook. 82% of Bitcoin holders are making money at the current price despite the drop because BTC is still up by over 90% YTD. However, 13% of holders are at a loss.

Effects of governments' Bitcoin sell-offs are grossly exaggerated
Source: IntoTheBlock

Transactions over $100K have seen over $86 billion over the past seven days. This means that there are high levels of activity and interest among institutional investors. Exchange inflows are a bit higher than outflows, though.

Source: IntoTheBlock

Exchange signals show a bullish sentiment with a smart price increase of 0.14% and a bid-ask volume imbalance of 7.44%. Clearly, buying demand is slightly stronger than the selling pressure on these exchanges, and this could lead to a price recovery.


Reporting by Jai Hamid

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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