Bitcoin’s recent stabilization comes amidst a notable decline in the total number of BTC wallets, marking the swiftest reduction since early October, just before the initiation of the major crypto bull cycle. The current market sentiment reflects a level of impatience, evident in the liquidation of over 487,000 wallets holding 1BTC or less within the past four days.
Historical trends suggest that such a reduction in wallets is often indicative of capitulation, a phase that could precede a market price rebound as smaller traders regain optimism about crypto as a viable investment. According to market observers, the disappointment stemming from the market’s performance since the approval of 11 ETFs over two weeks ago is widely attributed to the cause of these wallet liquidations.
Despite Bitcoin managing to surpass the $40,000 threshold, the flagship crypto is currently encountering resistance in breaking through the $40,300 level. A market analyst notes that rising open interest [OI] suggests an impending move, expressing expectations of a retest of the mid-range if bulls manage to reclaim or a retest of the highs if the opposite scenario unfolds.
Simultaneously, the United States government has filed a notice to sell over $130 million worth of bitcoin associated with the Silk Road seizures. The public notification outlines two lots of bitcoin slated for sale. The larger lot comprises approximately 2,800 BTC, valued at around $129 million, while the smaller lot consists of 58 BTC, estimated at $3 million.
DOJ Plans To Dump $130M Bitcoin
These bitcoins are linked to Ryan Farace, who was sentenced in Maryland last year to 54 months in prison for a money laundering conspiracy. The court found Ryan and his father, Joseph, guilty of laundering more than 2,874 Bitcoin initially used for drug trafficking and intended to be forfeited to the U.S. Both individuals had plans to move the funds into a foreign bank account.
The Department of Justice’s press release highlighted the Faraces’ involvement in a scheme to manufacture and distribute Xanax in exchange for Bitcoin through sales on darknet marketplaces.
According to their guilty pleas and other court documents, in November 2018, Ryan Farace was convicted in a U.S. District Court in Maryland for a scheme to manufacture and distribute [Xanax] in exchange for Bitcoin through sales on darknet marketplaces.