Bitget Chief Analyst Ryan Lee Evaluates German Government’s BTC Sale and Market Impacts

The crypto market recently experienced a panic-driven decline following the German government’s BTC sale.

Today, BTC began to stabilize and quickly broke through the $62,000 level, recovering by 5% in 24 hours. Ryan Lee, chief analyst at crypto asset exchange Bitget, evaluated the main reasons for the recovery in the market under 4 main headings.

1. Institutional Impact

The German government has ended the short-term BTC selling pressure by selling all of its tokens.

Mt. GOX has only conducted on-chain transfer tests and has yet to issue significant BTC refunds. FTX is expected to complete refunds in the second half of this year, bringing $16 billion worth of stablecoin assets into the market.

2. Positive Future and US Crypto Policies

Republican Party candidate Trump survived an assassination attempt over the weekend, and the market interpreted this as significantly improving his chances of winning future elections.

The Republican Party’s support for cryptocurrencies is evident in several ways: 1) they accept cryptocurrency donations; 2) Trump will attend a BTC conference on the 27th of this month and give a speech; 3) his 2024 campaign platform includes a promise to protect the US crypto mining industry.

3. Continuous Net Inflows into BTC Spot ETFs

The average holding cost for clients of new BTC spot ETF providers is around $55,000.

Over the past six trading days, there have been sustained net inflows into BTC spot ETFs totaling approximately $1.2 billion, effectively countering the German government’s sell-off.

4.Net Inflows into BTC-Related Derivatives

The sharp short-term decline in BTC caused frequent liquidations among derivatives traders, leading to a painful deleveraging process.

Over the past 24 hours, open interest in market contracts has increased by $2.5 billion. The implied volatility (IV) of BTC options has risen to 49% in the short term, and call options have become more expensive than put options, signaling a short-term bullish outlook among options traders.