Earlier today, a wallet controlled by a German government agency transferred a significant amount of Bitcoin (BTC) to cryptocurrency exchanges, while wallets associated with the defunct exchange Mt. Gox also showed activity for the first time in a month.

Bitcoin’s price dropped below $58,000 during the European morning hours, marking a nearly 5% decline over the past 24 hours and reaching levels not seen since early May. This sell-off was influenced by two main factors: the movement of a substantial amount of Bitcoin by the German Federal Criminal Police Office and activity from Mt. Gox wallets.

The German agency transferred over $75 million worth of Bitcoin to various crypto exchanges, which led to speculation that these funds might be sold. Lucy Hu, a senior analyst at crypto investment firm Metalpha, commented on the situation, stating that the movement of more than $50 million by the German government was a key reason for the market’s reaction.

Mt. Gox, which was once a major cryptocurrency exchange before its collapse following a massive hack in 2014, is set to begin distributing the stolen assets back to its clients. These repayments, which will be made in Bitcoin and Bitcoin Cash (BCH), have the potential to exert additional selling pressure on the market. Though the exact timing remains unclear due to numerous delays over the years, the planned distributions are causing concern among investors.

Arkham, a blockchain analytics firm, tracked the recent activity from Mt. Gox wallets, noting that they conducted small test transactions. During the Asian morning, these wallets moved approximately $25 worth of Bitcoin across three separate transactions. This type of movement often precedes larger transfers, suggesting a potential intention to sell larger amounts in the near future.

Additionally, Arkham’s data revealed that the German entity moved a total of $175 million in Bitcoin across various wallets, with $75 million of this sum being sent to crypto exchanges Kraken and Coinbase. Arkham’s CEO, Miguel More, has previously indicated that such transfers to exchanges often signal an intention to sell.

In the midst of these developments, Bitcoin has fallen below a critical technical indicator for the first time since October. This break below the indicator could signal a potential downtrend in the coming months, raising concerns among traders and investors about the future price direction of Bitcoin. The combination of large-scale transfers by significant entities and the looming distribution of Mt. Gox assets continues to create uncertainty and volatility in the cryptocurrency market.