Ethereum Price Drops As Chinese Govt. Sells 7,000 ETH Seized from PlusToken Scam

by

As a seasoned crypto investor with a decade of experience under my belt, I can’t help but feel a sense of deja vu reading about this latest development involving the Chinese government and Ethereum. The PlusToken saga is a painful reminder of past events that have shaken the crypto market to its core.

According to reports, the Chinese government transferred approximately 7,000 Ethereum tokens, valued at around $16.7 million, which had been confiscated from the multi-billion dollar Ponzi scheme PlusToken. This action has put some downward pressure on the price of Ethereum, causing it to drop below $2,400 levels and further decreasing by an additional 2% in recent hours.

Chinese Government to Sell 542,000 ETH?

Recent advancements have fueled discussions suggesting that the Chinese authorities might eventually liquidate the remaining 542,000 ETH (valued over $1.3 billion) obtained from the PlusToken Scam. If this happens, the Ethereum price could potentially plunge below $2,000 due to increased supply.

Analyst at OXT Research ErgoBTC reported that the Chinese wallets linked to the scam have been moving funds in recent times after staying dormant for nearly three years since 2021. PlusToken was a Chinese multi-billion dollar crypto scam that defrauded a massive 2.6 million users back in 2018 and 2019. Back then, the local Chinese police had confiscated $14 billion worth of BTC, ETH, and other altcoins.

From 2019 up until March 2020, a substantial amount of Bitcoin (BTC), approximately equal to $1.3 billion, was in circulation. Given that the total market capitalization of Bitcoin at that time was merely $160 billion, this quantity represented a notable proportion.

Initially, Ethereum’s holdings remained unchanged until mid-2021. At that point, the wallets moved one-third of around 840,000 ETH to a controversial exchange called Bidesk and later liquidated them. The rest of the ETH was inactive across several ‘mixing’ addresses until early August 2024. At this time, approximately $1.3 billion worth of 542,000 ETH was moved into 294 new wallets, as reported by ErgoBTC analyst. The analyst also noted that this amount was consolidated from multiple previous addresses.

With the ongoing attempts to confuse the Ethereum distribution, it’s reasonable to believe that the transfer of around 15,700 ETH observed yesterday might not be the final portion of the 540,000 ETH supply being distributed.

Ethereum Price Faces Selling Pressure?

In July of this year, after the German government’s sale of Bitcoin, there was a notable increase in the selling pressure on Bitcoin prices. Although the value sold was relatively small compared to the total Bitcoin market capitalization, it had a significant impact on market sentiment, cooling it down noticeably.

If China successfully unloads 542,000 Ether, it could potentially lead to significant selling pressure on Ethereum prices, causing them to drop below the $2,000 mark. At present, the Ethereum price is already dipping by 2%, falling under the $2,400 threshold.

Recently, crypto expert Ali Martinez indicated that Ethereum (ETH) appears to be following a near identical price trend. If ETH falls below $2,300, it might trigger a significant decline, potentially pushing the price down to around $1,800.

Ethereum’s current trades are happening within a symmetrical triangle. If it manages to maintain a closing price above $2,600 or below $2,300, it will signal the potential direction for Ethereum’s price movement.

— Ali (@ali_charts) October 8, 2024

Continuing with the trend, large Ethereum investors have been offloading their assets over the last week. This selling activity by inactive holders seems to be affecting the optimism among investors.

Read More

2024-10-10 08:30