Has bitcoin carved out the low? 

The German government’s been quite busy raking in some cold hard cash as it seeks to offload portions of its bitcoin stash. 

While analysts have been warning about the potential impact of the Mt Gox repayments, the German government’s moves came as a bit of a surprise to some.

However, the selling from the German government isn’t enough, at this point, to put a stop to John Glover’s bullish attitude. The chief investment officer of Ledn thinks that bitcoin could top $80,000 — if not higher, with other analysts calling for $100,000 — by the end of the year. 

That might not stop bitcoin from another slide lower, though. He reiterated that he’s watching the $55,000 to $56,000 level, as we previously reported. If it falls further, then keep an eye on $49,000.

Read more: Bitcoin bulls meet their third final boss after US and Germany: Mt. Gox

“And you know, it is a significant amount of bitcoin that’s hitting the marketplace. You know, 140,000 or whatever that number, is going to be a lot. But as we talked about before, who knows how much of that is actually going to get sold?” Glover said. Even prior to Mt Gox, the price action “couldn’t break and make new highs.”

“We went up to that $73,000, we dipped off to the mid-60s. We tested $72,000, then dipped off mid-60s, tested one more time, and then came up. Anyone who was long from that March rally from $35,000 up to $73,000…I can see when there are three failed attempts to make new highs, they’re going to start thinking about taking profit,” he added. So long as they don’t have diamond hands, of course.

Keep in mind that we’re in the dog days of summer as well. For traditional markets, that generally means lower volume. Glover thinks that the entrance of so many institutional investors means that the trend is carrying over to crypto markets as well.

“The one thing that I found interesting in the last 24 hours of trading is that volumes didn’t jump up. I was kind of thinking that with the volatility we saw from $57,000 to $54,000 back up again, we would have seen some pretty decent increase in volumes. We didn’t see that. And that makes me slightly nervous because you tend to see a spike in volumes at bottoms and up tops. And we didn’t see a spike in volume, even though we went down and made a new kind of recent low. So that makes me a little bit nervous that maybe we haven’t seen the bottom yet. But again, it’s hard to say,” Glover said. 

The German government’s selling, however, muddies his read a little bit. Though, he thinks that the move makes sense.

“I mean, that was a significant amount of bitcoin that they supposedly sold in the last 24 to 48 hours. Interesting to me that they’re doing it. But you know, when you look at every government being cash-strapped, it’s not really surprising,” he said. 

In total, he estimates that $25 billion worth of bitcoin has been repossessed by governments, which is just another overhang to keep in mind because governments are going to seek to monetize those holdings. 

Given that the market is trading roughly $30 to $40 billion a day in bitcoin alone, that kind of selling can be absorbed, he added. So far, the German government’s offloaded roughly $2 billion, per Blockworks’ David Canellis.

Looking at the chart over the past week, it’s clear that most of the selling is happening during the Asia/Europe hours — which makes sense given both Mt Gox and the German government — but there’s buying interest when the US starts to log on.

“That’s what we’ve seen the last couple of sell-offs. It’s been late European, early Asian sell-off, and then the US comes in and starts buying it back. So I think there’s the overhang from Mt Gox in Asia, and then there’s the desire for traditional finance players to add to their portfolios on dips. So that kind of makes sense [with] what’s happening here. It’s just who’s going to win this battle between the bears and the bulls is a little bit tough,” Glover said.

A shorter version of this article first appeared in Tuesday’s Empire Newsletter. Sign up here to never miss an issue.

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