Bitcoin (BTC) Slid Wednesday as Investors Were Alarmed by the Transfer of Half a Billion Dollars Worth of Seized Bitcoin Out of U.S. Government Wallets

What Happened: Bitcoin rallied to $61,670 during the morning hours on cooler-than-expected July consumer price index (CPI) data, but quickly pulled back

Leading cryptocurrencies slid Wednesday as investors were alarmed by the transfer of half a billion dollars worth of seized Bitcoin out of U.S. government wallets.

What Happened: Bitcoin rallied to $61,670 during the morning hours on cooler-than-expected July consumer price index (CPI) data, but quickly pulled back and trended down after the U.S. government moved as many as 10,000 Bitcoins, worth $593 million, recovered from the Silk Road incident.

The top cryptocurrency rose 5.45% this week, but it has failed to fully recover losses from the contraction triggered over recession fears earlier this month.

Ethereum witnessed a similar trajectory, sailing to $2,770 morning before retracing to the high $2,600 region.

The total cryptocurrency liquidation hit $121 million in the past 24 hours, with long liquidations accounting for 73% of the total.

Bitcoin's Open Interest dipped marginally by 0.06%, while the number of traders going long on the leading currency rose in the last 24 hours.

The market continued to be in a state of "Fear," according to the Cryptocurrency Fear & Greed Index, indicating significant selling pressure.

Top Gainers (24-Hours)

The global cryptocurrency market stood at $2.09 trillion, shrinking 1.90% in the last 24 hours.

Stocks inched higher Thursday on favorable inflation data. The Dow Jones Industrial Average rose 242.75 points, or 0.61%, to end at 40,008.39. The broad-based index S&P 500 gained 0.38% to close at 5,455.21. The tech-heavy Nasdaq Composite added 0.03% to end at 17,192.60.

The CPI saw a cooler-than-anticipated annual headline print in July, boosting investors' hopes of larger interest rate cuts by the Federal Reserve.

According to the CME FedWatch tool, there was a 62% probability of the Fed lowering rates to the 5.25-5.5% range.

See More: Best Cryptocurrency Scanners

Analyst Notes: Well-known cryptocurrency analyst Rekt Capital pointed out how $61,700 was providing stiff resistance to Bitcoin bulls.

The analyst also highlighted how King Crypto was oscillating between late June wedge highs of $62,000 and the early July wedge highs of $58,280.

#BTC Notice how the local highs of ~$61700 (black) are acting as resistance

Interestingly, BTC is consolidating between the late June wedge highs (~$62000 black) which are back to figuring as resistance and the early July wedge highs ($58280) which are now acting as support… https://t.co/tkr08M31wG pic.twitter.com/GwlNRRHYOU

Widely-followed trader Michaël van de Poppe observed that the possibility of a rate cut by the Fed was "approaching," and predicted that it would lead to upward price action for Bitcoin as well.

CPI data comes out and is positive, slightly lower than expected.

The likelihood of a rate cut is approaching for the FED, through which the likelihood of QE & upward price action for #Bitcoin has increased as well. pic.twitter.com/IfzIcmZ3OU

Image via Shuttersstock

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