Ark Invest says Bitcoin is oversold after the German government sell-off

Asset manager ARK Invest released a report on July 18th detailing Bitcoin’s overall performance in June after German authorities sold billions of dollars worth of BTC. According to the report, Bitcoin is oversold in June.

Also Read: Ripple’s XRP price continues to decline despite legal win against the U.S. SEC 

The German authorities allegedly sold 50,000 BTC, which had been confiscated from a streaming platform hosting pirated content called Movie2k in 2020. The massive sell-off brought Bitcoin prices below the $55,000 mark from $70,000+ recorded in early June.

The report also emphasized miner capitulation as a bullish indicator for Bitcoin’s future prices.

Bitcoin ETFs receive mega inflows – Ark Invest report

The ARK Invest report also highlighted that Bitcoin ETFs continued to receive inflows, further cementing the firm’s bullish sentiment. According to the report, investors continued to channel funds into Bitcoin ETFs despite the selling pressure from German authorities who were cashing out. Existing ETF investors also refrained from cashing out on their ETF investments.

Data from CryptoQuant supports ARK’s view on miner capitulation. According to CryptoQuant, miner capitulation levels commenced after the Bitcoin halving event in April. Since then, Bitcoin miner yields have significantly reduced, forcing mining firms to cash out on their BTC holdings to remain liquid and manage operations.

While German authorities liquidated their BTC holdings, investors turned their attention to Bitcoin ETFs. On June 16th, Bitcoin ETFs received inflows worth more than $400 million. BlackRock’s IBIT received inflows worth $260 million, the highest inflow since the beginning of July. 

the Bitcoin ETFs are in "two steps forward" mode after one step back in June with another +$300m yesterday and $1b for week. YTD net total (the most imp number in all this) has crossed +$16b for first time. Our est for first 12mo was $12-15b so already cleared that w 6mo to go. pic.twitter.com/0V7wE9D5OU

— Eric Balchunas (@EricBalchunas) July 16, 2024

Bloomberg researcher and analyst Eric Balchunas said that the market was performing better than he had anticipated.

Balchunas had initially predicted that Bitcoin ETFs would grow to $15 billion in the first 12 months after the U.S. SEC’s approval. However, U.S.-based ETFs have grown to a market share of more than $16 billion in just 6 months after launch. The ETFs received inflows exceeding $1 billion in the last two weeks.

The Mt. Gox rehabilitation program could impact Bitcoin prices

Despite all these factors pointing to bullish market sentiment, Bitcoin prices face possible turbulence from liquidation transactions initiated by Mt. Gox creditors. Mt. Gox filed for bankruptcy in 2014 and has commenced the disbursement process to pay its creditors. 

The defunct exchange recently transferred more than 48,000 bitcoins to an unlabeled wallet address believed to belong to Kraken. Kraken is among the five selected exchanges to facilitate the disbursement process. 

Shortly after Arkham Intelligence flagged the transaction, Kraken emailed Mt. Gox creditors, acknowledged receiving the funds, and promised to commence the payout process within two weeks. On July 16th, Nobuaki Kobayashi announced that 13,000 creditors had already benefited from the rehabilitation program.