Investing.com– Bitcoin slipped on Tuesday, remaining pinned below record highs as sentiment was rattled by reports that the U.S. government had mobilized some of its coins confiscated from the Silk Road marketplace.
The world’s largest cryptocurrency fell into a trading range below the $100,000 level in recent weeks, after largely failing to cross the coveted level during a rally through November. But it still remained close to recent record highs of over $99,000.
Bitcoin fell 1.8% to $94,111.0 by 09:03 ET (14:03 GMT).
Most major altcoins rallied past Bitcoin in anticipation of more friendly policies under President-elect Donald Trump. XRP was a major beneficiary of this trend, hitting an over six-year high on speculation that the SEC will drop its long-running lawsuit against issuer Ripple.
Bitcoin spooked by govt moving $1.9 bln Silk Road tokens
Bitcoin clocked some losses after Arkham Intelligence data showed the U.S. government had moved nearly 20,000 coins, worth about $1.9 billion, onto Coinbase (NASDAQ:COIN). Such a move usually heralds a sale event.
The coins were confiscated from the now defunct Silk Road online black market, and represent roughly 10% of the government’s overall Bitcoin stockpile, according to Arkham data.
The mobilization of tokens onto an exchange usually heralds a sale event, with the government having sold off tokens through similar channels in the past.
But the move may not necessarily herald a sale, given that Coinbase has a contract with the Justice Department’s U.S. Marshals Service to provide custody and trading of its digital assets.
Trump Bitcoin reserve appears unlikely- TD
TD analysts downplayed the possibility of a Bitcoin Strategic Reserve under Donald Trump, stating that the President-elect’s “ironclad” view that the dollar must remain the world’s reserve currency would stymie any attempts to hedge against the greenback.
Bitcoin’s latest rally was driven by optimism over Trump’s election victory, given that he promised to enact crypto friendly policies and potentially establish a Bitcoin reserve.
But while Trump’s cabinet picks all harbor crypto-friendly views, doubts have emerged over the possibility of a reserve. The establishment of a reserve would also require fiscal funding to buy more Bitcoin, which appears unlikely in the face of a Republican-led Congress that aims to slash government spending.
Crypto price today: altcoins extend rally, XRP shines
Broader crypto prices mostly rallied past weakness in Bitcoin. World no.2 crypto Ether fell 2.1% to $3,560.45
XRP rose further after its recent rally saw it become the world’s third-largest crypto. The altcoin added 3% to $2.50, hitting an over six-year high on speculation that a change in leadership at the SEC will see the agency drop its long-running lawsuit against Ripple.
XRP has surged roughly 400% over the past month, reaching price levels last seen in 2018 and catching many by surprise. The rally began in November, fueled by renewed investor confidence following the Republican victory in the U.S. election, which boosted interest in tokens tied to U.S.-based companies like Ripple Labs.
Whale activity has been a key driver of this move, with data from CryptoQuant showing a significant increase in transactions from large wallets. These movements, whether inflows or outflows to exchanges, are often a strong indicator of market sentiment. Large inflows to exchanges may signal a bearish trend as whales prepare to sell, while outflows can point to accumulation and a bullish outlook.
According to CryptoQuant analyst Woominkyu, whale activity often aligns with local price peaks. “Historically, significant spikes in whale-to-exchange transactions (marked by red circles) align closely with XRP price peaks,” Woominkyu stated. “This suggests that whales tend to move large amounts of XRP to exchanges to sell near local or cycle tops.”
“The latest spike in whale-to-exchange activity coincides with XRP reaching a local price of around $2.3. This could indicate whales preparing for potential profit-taking or increased market activity,” Woominkyu added.
Meanwhile, Solana fell 3.6% Tuesday, while Cardano surged almost 9%. Polygon rallied over 11%.
Meme tokens lagged, with Dogecoin dropping 5%.
Ambar Warrick contributed to this report.
