Bitcoin Price Plummets As US Government Transfers $2B In Seized Silk Road BTC, Coincidence?

Ronaldo Marquez

Last Updated: June 11, 2024 8:55 am

3 mins read

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The crypto market is abuzz with speculation as the US government recently moved significantly regarding seized Bitcoin (BTC) linked to the infamous Silk Road dark web marketplace. This development comes at a critical time for the Bitcoin price, which has struggled to maintain its position above the $70,000 threshold after hitting its current all-time high (ATH) of $73,700 on March 14.

As the largest cryptocurrency experiences yet another round of price correction, the movement of these seized funds has triggered intense speculation about a potential sell-off by the US government.

Seized Silk Road BTC On The Move

According to on-chain data, a wallet linked to the US government recently transferred 30,175 Bitcoin, seized from the Silk Road dark web marketplace.

This transfer follows the earlier seizure of over 50,000 Bitcoin from James Zhong, who illegally obtained the cryptocurrency from the Silk Road in 2012. The US Department of Justice’s (DOJ) seizure of these funds marked the largest cryptocurrency seizure in its history.

This is not the first instance of the US government moving Bitcoin obtained from criminal cases. In March 2022, the government sold 9,800 Bitcoin, with plans to sell an additional 41,500 BTC. However, the recent transfer of the 30,175 BTC from Silk Road-related addresses has raised questions about the fate of these funds and their potential impact on the Bitcoin price correction.

Benjamin Skew, an on-chain data expert, took to social media to offer insights into the situation. Skew clarified that although there is chaos surrounding the Silk Road Bitcoin being sent to Coinbase for sale, a closer examination reveals that the main funds were transferred to a newly created wallet that remains inactive.

However, Skew stated that 2,000 BTC of the total amount was transferred to the alleged Coinbase wallet for undisclosed purposes, while the rest was sent to a newly created wallet.

200EMA Support Crucial For The Bitcoin Price

The Bitcoin price is currently witnessing a lack of bullish momentum as the cryptocurrency continues to face resistance in consolidating above the crucial $70,000 threshold. However, there is still hope on the horizon.

Crypto analyst Ali Martinez highlights the importance of the 200-epimetric moving average (EMA) on the 4-hour chart of BTC. According to Martinez, this indicator has acted as formidable support since early February and continues to play a crucial role in preventing further downward movement.

The focus on the 200EMA stems from its potential to either catalyze a rebound or trigger more losses for Bitcoin. Martinez stated that if the 200EMA continues to hold as strong support, it signifies a significant probability of a price rebound. This scenario would provide renewed bullish momentum and potentially propel Bitcoin’s price above the $70,000 mark.

However, if the 200EMA is broken, as it was in mid-January, as seen in the chart below, the analyst suggests that this could expose the Bitcoin price to further downward pressure and potentially lead to further losses.

Bitcoin (BTC) is trading at $65,390, continuing its recent price correction. Over the past 24 hours, BTC has experienced a 5% decline; over the past seven days, it has seen a significant drop of over 6%.

The market closely monitors whether the current key support level can sustain further price drops or if a potential bounce will occur before reaching that point. The outcome of these scenarios remains uncertain.

Featured image from Shutterstock, chart from TradingView.com

Ronaldo Marquez

Ronaldo is an experienced crypto enthusiast dedicated to the nascent and ever-evolving industry. With over five years of extensive research and unwavering dedication, he has cultivated a profound interest in the world of cryptocurrencies.

Ronaldo's journey began with a spark of curiosity, which soon transformed into a deep passion for understanding the intricacies of this groundbreaking technology.

Driven by an insatiable thirst for knowledge, Ronaldo has delved into the depths of the crypto space, exploring its various facets, from blockchain fundamentals to market trends and investment strategies. His tireless exploration and commitment to staying up-to-date with the latest developments have granted him a unique perspective on the industry.

One of Ronaldo's defining areas of expertise lies in technical analysis. He firmly believes that studying charts and deciphering price movements provides valuable insights into the market. Ronaldo recognizes that patterns exist within the chaos of crypto charts, and by utilizing technical analysis tools and indicators, he can unlock hidden opportunities and make informed investment decisions. His dedication to mastering this analytical approach has allowed him to navigate the volatile crypto market with confidence and precision.

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Outside of the crypto realm, Ronaldo enjoys indulging in other passions. As an avid sports fan, he finds joy in watching exhilarating sporting events, witnessing the triumphs and challenges of athletes pushing their limits. Furthermore, His passion for languages extends beyond mere communication; he aspires to master German, French, Italian, and Portuguese, in addition to his native Spanish. Recognizing the value of linguistic proficiency, Ronaldo aims to enhance his work prospects, personal relationships, and overall growth.

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With a genuine desire to become the best version of himself, Ronaldo is committed to continuous improvement. He sets personal goals, embraces challenges, and seeks opportunities for growth and self-reflection. Ultimately, combining his passion for cryptocurrencies, dedication to learning, and commitment to personal development, Ronaldo aims to go hand-in-hand with the exciting new era that the emerging crypto technology is bringing to the world and societies.

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