Bitcoin's (CRYPTO:BTC) price dropped to $55,000 on Monday as the German government transferred over $900 million worth of BTC holdings to exchanges and market makers.

The transfer involved 16,309 BTC sent to Bitstamp, Kraken, Coinbase, Flow Traders, and Cumberland DRW, causing a 3% price drop before a slight recovery to above $56,000.

This action follows a broader market decline, with BTC hitting its lowest price since February last week.

The German government's sale, alongside similar actions by the U.S. government and the Mt. Gox repayments, is contributing to a supply overhang in the market.

As of now, Germany has reduced its BTC holdings from 50,000 to 23,788 BTC, valued at $1.3 billion.

Market observers are closely watching these developments amid a quiet summer trading season.