To the outside world, bitcoin (BTC) dropping $10,000 to $92,000 in a matter of days could signal the end of the bull run. A caveat to this could be that bitcoin continues to consolidate below a key psychological threshold of $100,000.

Unconfirmed reports from DB News suggest that the Department of Justice (DOJ) has been authorized to liquidate 69,370 BTC ($6.5 billion) seized from the Silk Road marketplace.

The report comes just 11 days after President-elect Donald Trump’s inauguration. Trump has promised not to sell any of the 187,236 BTC still held by the US government, according to Glassnode data. The majority of the tokens held by the government come from the seizures of Bitfinex and Silk Road.

There are a few reasons why fears of a sell-off may be overblown: The reports of 69,370 BTC being liquidated seem like a lot, and if they are sold, they will most likely be sold in an orderly fashion as they are asked to get the best possible price. At the same time, the market already knew that this was a possibility, so this could have already been baked into the market’s expectations.

Second, the market has absorbed over 1 million bitcoins since September. This can be seen from the drop in holdings of long-term owners, which are defined by Glassnode as investors who have held bitcoin for more than 155 days. As a cohort, they now have 13.1 million BTC. Since September, however, the price has gone from approximately $60,000 to over $100,000.

The last reason is that we have previous data about another government selling a similar amount of bitcoin. The German government sold approximately 50,000 BTC from mid-June to mid-July 2023. The total value of the coins was around $3.5 billion then, about half the value now.

However, the market effectively led the selloff and the price bottomed around July 7th at around $55,000, while the German government still held at least 25,000 BTC. Which shows that this amount of bitcoin does not dictate the market.