The price of Bitcoin dropped from its 24-hour peak of nearly $116,000 to about $110,000 overnight, as substantial on-chain movements from both the U.S. government and BlackRock raised speculation about possible institutional adjustments.
According to on-chain analytics, the U.S. government transferred 667.6 BTC, valued at approximately $74.8 million, to a new wallet earlier today. This transaction quickly raised concerns that the coins — likely confiscated from previous law enforcement actions — could be heading to an exchange for liquidation.
The transfer is likely linked to the U.S. government’s August 2025 conviction of Sergei Potapenko and Igor Turogin in the Hashflare mining fraud case, according to Alex Thorn, Head of Firmwide Research at Galaxy Digital.
Instead of a sale, this move seems to signify the official forfeiture of the Bitcoin into U.S. government custody, either under the supervision of the Attorney General or for use in the Strategic Bitcoin Reserve.
Simultaneously, BlackRock deposited $371 million in ETH and $78 million in BTC into Coinbase, a transaction that some traders speculated could indicate upcoming portfolio rebalancing.
Bitcoin price sentiment and long-term value.
The drop to $110,000 follows one of Bitcoin’s most tumultuous periods in years. The larger market is still processing last week’s drastic decline, during which over $19 billion in positions were liquidated within hours — marking the largest single liquidation event in the history of crypto.
Over 1.6 million traders were forced out of their positions as cascading margin calls spread across exchanges, resulting in an 80% drawdown in various cryptocurrencies and many altcoins.
Much of the recent turmoil was driven by excessive leverage rather than widespread selling. The $19 billion loss represented a clearing of speculative positions as funding rates sharply turned negative, reaching their most bearish points since October 2023, when Bitcoin was trading around $28,000, based on analysis from Bitcoin Magazine Pro.
On-chain data supports this viewpoint. Long-term holders continue to remain steady, as coin days destroyed and spent output profit ratio metrics indicate that most of the selling originated from recent entrants capitulating at a loss.
Historically, these liquidations have signaled local bottoms rather than the end of cycles.
Meanwhile, Bitcoin’s network fundamentals remain strong. Active addresses, hash rate, and transaction throughput all indicate consistent organic activity despite the recent sell-off.
At the time of writing, Bitcoin is trading at $111,630.
