We investigate Bitcoin’s (BTC) price fall below the $27,000 support area and whether the largest cryptocurrency can recover.
The Bitcoin (BTC) price fell below $27,000 following a daily bounce amid cool U.S. inflation numbers. At press time, the largest cryptocurrency by market capitalization recovered its position and traded at around $27,460.
Did U.S. Government Sell Bitcoin?
As expected, the decline started a cascade of liquidations. Coinglass reported $47 million in long-position liquidations in one hour.
Crypto community members quickly blamed the decline on a potential BTC sale by the U.S. government. A similar selloff occurred when Twitter user @tier10k inaccurately reported the movement of funds in the U.S. government and Mt. Gox wallets.
However, this time, the panic was avoided. On-chain analyst @ZachXBT clarified that addresses linked with the authorities did not perform any transactions.
Blockchain analytics platform Arkham Intelligence denied rumors that user labels marking addresses caused the problem. Its interface allows you to add labels to wallets and change data sets manually, a feature one of its clients may have abused.
The company said it only identified seven Bitcoin wallets linked to the U.S. government, with none involved in transactions.
Crypto enthusiasts rightly argued that Arkham’s user labels could not be distinguished from official names.
What to Expect From BTC Price in Near Future
However, analysts agree almost unanimously that the Bitcoin price may soon expect a significant correction.
On-chain data platform Glassnode reports higher selling pressure as researchers at Kaiko highlight low market liquidity.
BeInCrypto recently reported experts’ 2023 forecasts for Bitcoin.
For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.
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