As a seasoned crypto investor with a knack for navigating the digital financial landscape, I must admit that this latest development has stirred a sense of unease within me. The potential sell-off of thousands of Ether by the Chinese government and the recent activities of the Ethereum Foundation have sent ripples of worry through the crypto community.
Recent findings indicate that the Chinese authorities are transferring vast quantities of Ether (ETH), which was confiscated from a $4 billion cryptocurrency pyramid scheme, sparking unease among Ethereum investors. This apprehension stems from the potential for a significant sell-off due to these transfers.
Investor Fear Upcoming ETH Selling Spree
Last Wednesday, a user of X platform reported that, for the first time in over three years, the Chinese government transferred the last batch of Ethereum confiscated from the PlusToken Ponzi scheme. These Ethereum-holding addresses had been inactive since 2021.
In the beginning of August, several wallets associated with confiscated cryptocurrency assets moved approximately 2,800 Ether (around $6.5 million) into a single wallet. This action raised suspicions that a significant sale might be imminent, causing concern among observers.
It appears that the latest transactions involving the digital wallets suggest they are initiating a sell-off. On Tuesday, multiple wallets moved approximately 15,700 Ether among themselves, possibly to make it harder to trace the movement of these tokens.
Approximately 7,000 Ether (valued at approximately $16.7 million) was transferred to various exchange deposit addresses and likely sold on the previous day.
After the failure of the PlusToken project, approximately $4.2 billion worth of cryptocurrency assets were confiscated by Chinese authorities from the exchange. This seizure included about 840,000 Ethereum tokens, which were valued at around $215 million at that moment.
The majority of the assets remained undisturbed until 2021, at which point about a third of the confiscated Ethereum (ETH) was transferred to the now-defunct cryptocurrency exchange Bidesk and, it is claimed, sold. After the supposed sale, the ETH was moved across numerous “mixing addresses” before being gathered again in 294 new addresses this August.
As per the report, it’s stated that the Chinese government currently owns approximately 542,000 Ethereum (ETH), valued at over $1.3 billion. Moreover, the post pointed out significant selling pressure that emerged when the government liquidated its confiscated Bitcoin (BTC) in 2020, which is comparable to around $10 billion of selling pressure today.
As a researcher examining the current state of Ethereum, I find it improbable that the 15.7k ETH distributed actively yesterday represents the final portion of the 540k ETH supply distribution, as a recent post on X has proposed. This renews concerns among Ethereum investors about potential large-scale sell-offs in the future.
Ethereum Foundation Sells Again
It’s not just the moves by the Chinese government that are causing concern among investors, but also the recent participation of the Ethereum Foundation in a massive selling spree by the “whales” (large-scale investors), as indicated by on-chain data analysis.
According to recent updates, Ethereum Foundation-connected wallets transferred approximately $3.21 million within the past week. One of these wallets transferred 1,250 ETH to the digital exchange Bitstamp on Tuesday, while another connected wallet sold 100 ETH for about 242,828 DAI on Wednesday.
Earlier, Vitalik Buterin, one of Ethereum’s co-founders, explained some of his on-chain actions that had contributed to investor apprehension. In the past day, Ethereum has experienced a 2% decrease in price and dipped below the $2400 support point.
crypto expert Ali Martinez commented on Ethereum’s trends, pointing out that whenever Ethereum surpasses its TD setup resistance line, it’s often followed by a robust bullish phase. Conversely, when Ethereum falls below its TD setup support trendline, there is usually an average 53% correction.
According to the analysis, it’s recommended to keep an eye on the $2,250 level as a potential key support. If this level is breached, there could be a significant price decline. Currently, Ethereum (ETH) is being traded at $2,383.
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2024-10-11 07:12