Bitcoin Retreats From Six-Week High as Traders Eye Potential US Token Sale

Bitcoin surged to nearly $70,000 on Monday before dipping by as much as 2.2% to $66,482 in New York trading, retreating from a six-week high as traders

Bitcoin price dipped on Monday as traders shifted their attention to speculation that the US government may sell seized tokens soon after former President Donald Trump committed to forming a government-controlled stockpile of the cryptocurrency if re-elected.

Bitcoin last fell by as much as 2.2% to $66,482 in New York trading after surging to nearly $70,000 earlier on Monday.

The US reportedly transferred $2 billion worth of Bitcoin to a new digital wallet address on Monday, according to blockchain research firm Arkham’s post on X social media platform.

Analysts suggest that these tokens may originate from the Silk Road dark web marketplace, which was known for illicit transactions before its closure.

"Despite the optimism from the Bitcoin 2024 conference regarding Trump's comments and Senator Lummis' reserve bill, the market is grappling with significant supply concerns," said Shiliang Tang, president of Arbelos Markets.

“Ahead of President Trump’s recent speech at the Bitcoin Conference, there was substantial short-term call buying. As the event concluded, option buyers have begun unwinding these positions, resulting in selling pressure on Bitcoin,” said Spencer Hallarn, global head of OTC trading at GSR.

Trump vowed during the conference to make the US the leading hub for cryptocurrencies if he wins the upcoming election. Some traders interpreted the government's token movement as a deliberate act, while Trump also declared that he would not sell seized crypto but instead establish a strategic Bitcoin reserve.

"Trump's presence at the event solidified Bitcoin's status as a significant factor in the election," said Chris Weston, head of research at Pepperstone Group.

As these developments unfold, the market now awaits the Federal Reserve's meeting later this week, anticipating signals for a potential rate-cutting cycle which has boosted market sentiment.

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