Bitcoin
U.S. to sell $117M in seized Bitcoin – Should you be concerned?
The U.S. has announced its intent to sell some of the seized Bitcoin, but will this impact the price of the asset?
- The U.S. announces the sale of around $117 million worth of Bitcoin.
- BTC sees more exchange inflows as the price attempts to stabilize at $40,000.
Recent headlines have been dominated by the Bitcoin [BTC] spot ETF flows, particularly the GBTC flow, which has garnered increased attention amid fluctuations in BTC’s price. The U.S. government’s latest action has further raised concerns, prompting speculation about its potential impact on the flow and price of BTC.
U.S. sell-off seized Bitcoin
As per an online notice, the U.S. Department of Justice has declared its intention to sell a portion of Bitcoin obtained from the legal case against Ryan Farace and his father Joseph Farace.
The charges against them included money laundering conspiracy.
The Justice Department reported the successful recovery of over 2,933 BTC from the Farace family. The asset is presently valued at about $117 million, though it was valued at around $133.5 million when the forfeiture notice was released on 10th January.
Ryan Farace was convicted in 2018 for the production and sale of Xanax pills on dark web platforms such as Silk Road.
While this is not the first time the U.S. has confiscated and sold Bitcoin, the current state of BTC prices has increased interest in the recent announcement by the U.S. agency.
Inflow dominates Bitcoin’s netflow
The recent announcement prompted increased attention, particularly when examining the netflow of Bitcoin on exchanges.
According to data from CryptoQuant, there has been a notable increase in inflows compared to outflows in recent days.
Essentially, more BTC has been directed to exchanges for selling purposes. This dynamic implies a potential impact on the price, with supply surpassing demand.
Source: CryptoQuant
Although the daily inflow has not been notably high, the cumulative numbers have been significant.
As of this writing, there was a temporary pause in the trend, shown by a slight outflow. Notably, the U.S. announcement coincided with a continuous outflow from Grayscale Bitcoin.
BTC’s attempt at recovery continues
An examination of the daily timeframe chart for Bitcoin showed recent attempts at recovery over the past few days. However, this recovery has not demonstrated significant strength yet, with BTC fluctuating in and out of the $40,000 price range.
At the time of this report, it was trading at around $40,000, reflecting an increase of less than 1%.
Additionally, the decline has pushed it below the neutral line on the Relative Strength Index (RSI), and it is currently below 40.
Source: Trading View
Read Bitcoin (BTC) Price Prediction 2024-25
Furthermore, its short moving average (yellow line), initially acting as support, has now become a resistance level at around $43,000.
The prevailing sentiment is that once the outflow stabilizes, the price of Bitcoin is expected to find stability.
