Bitcoin has found stability above $57,000 after sliding to $55,000 on Monday. The recovery came as a German government entity received over $200 million worth of Bitcoin back from various exchanges late in the U.S. day, which helped revive market sentiment.
BTC Price Movement
As of the European morning, Bitcoin was trading around $57,400, marking a 1% increase over the past 24 hours. The initial drop to $55,000 occurred after a wallet belonging to the German Federal Criminal Police Office (BKA) sent over $900 million in Bitcoin to various addresses, causing concern among traders. However, within the last 12 hours, the BKA received refunds from Kraken, Coinbase, and Bitstamp, indicating that these assets did not ultimately enter the market, as shown by Arkham data.
Bitcoin ETF Inflows
Spot Bitcoin ETFs saw nearly $300 million in net inflows on Monday, the highest since early June when Bitcoin traded over $70,000. Leading the buying activity was BlackRock’s IBIT with nearly $180 million in net inflows, followed by Fidelity’s FBTC. Grayscale’s GBTC, known for its frequent outflows, recorded over $25 million in purchases. According to a CoinShares report, some investors view the recent price drop as a buying opportunity. Historically, July has been a bullish month for the crypto market, with an average return of 9%, and traders expect this trend to continue.
Also Read: German Government Sells $900M in Bitcoin, Pressures Market
Mining Difficulty Drop
Data from Coinwarz shows that Bitcoin’s mining difficulty dropped from 83.6 TH/s to 79.50 TH/s on June 5, a level last seen in March, just before the halving. CryptoQuant noted that this is one of the largest difficulty drops since the collapse of crypto exchange FTX, which led to a 10% price drop within a week. Such downward adjustments decrease the network’s hashing power proportionally. This drop benefits smaller miners and can lead to profitability for mining farms that had previously shut down due to high costs.
In June, miners were a major source of selling pressure, offloading over $1 billion worth of Bitcoin as prices ranged between $65,000 and $70,000. The reduction in mining difficulty may alleviate some of this pressure by allowing smaller miners to remain operational and profitable.
