In a post on X, Bitwise CIO Matt Hougan commented on reports of a potential $6.5 billion Bitcoin sell-off by the Biden administration. He offered two bullish ways the market could tackle the situation. He wrote, “If the US government actually sells $6.5B bitcoin in the waning days of the Biden Administration: 1) The market will hoover it up; 2) The new Administration will buy it back.”
Bitcoin markets reacted sharply to this development, with prices plunging to $91,800 on Thursday, the lowest since December 9, marking a 43-day low. The BTC price has seen a steep 10% decline over the past two days, intensifying the volatility that has characterized recent trading sessions.
Market Turns Bearish Amid Biden Government’s BTC Selloff News
Reports indicate that the U.S. Department of Justice (DOJ) has received judicial clearance to liquidate 69,370 BTC, seized from the Silk Road marketplace. Chief U.S. District Judge Richard Seeborg dismissed a motion aimed at preventing the forfeiture, enabling the sale to proceed.
If the US government actually sells $6.5b bitcoin in the waning days of the Biden Administration:
1) The market will hoover it up;
2) The new Administration will buy it back— Matt Hougan (@Matt_Hougan) January 9, 2025
This announcement has added to the bearish sentiment in a week already marked by a downtrend. The hotter-than-expected JOLTs jobs data earlier in the week had already shaken investor confidence. Now, the prospect of a massive sell-off has further spooked traders, resulting in a rapid decline in Bitcoin’s value from $95,060 to $91,800.
Bulls Struggle to Defend Key $90K Level
As Bitcoin price nears the critical $90,000 threshold, bullish traders are ramping up efforts to prevent a further breakdown. Data from Coinglass reveals concentrated long positions totaling $721 million around this level, reflecting heightened bullish leverage aimed at averting deeper losses.
While bearish traders dominate the derivatives markets, with short positions exceeding $3.5 billion, the significant leverage on long positions at $90,000 could prompt spot purchases to cover potential liquidation risks. This defensive buying may create an opportunity for a short-term rebound if selling pressure subsides.
Potential Scenarios Ahead for Bitcoin Price
Technical indicators suggest the formation of a double bottom pattern near $90,000, a historically bullish signal for trend reversals. Additionally, rising trading volumes and the volume-weighted average price (VWAP) trending above current levels suggest growing buying interest.
If Bitcoin manages to maintain support above $90,000, a recovery toward $93,217—the VWAP threshold—could occur, potentially paving the way for a rally to $100,000. However, failure to hold this critical level may invalidate the double bottom pattern and push prices toward $84,000, where additional liquidity levels could come into play.
With President-elect Donald Trump set to assume office soon, speculation is mounting over whether the Biden administration will complete the sell-off before the transition. Trump’s pro-Bitcoin stance and his proposal for a national Bitcoin reserve add further intrigue to the unfolding narrative.
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