The Chinese government has reportedly moved a total of 7,000 Ethereum coins worth $16.7 million seized from the multibillion-dollar Ponzi scheme PlusToken. This has already put some pressure on Ethereum price, which has fallen another 2% below the $2,400 level in the past few hours.
Chinese government to sell 542,000 ETH?
Recent developments have sparked speculation that the Chinese government may eventually sell the remaining 542,000 ETH, worth more than $1.3 billion, seized in the PlusToken scam. This could cause the price of Ethereum to plummet below $2,000.
OXT Research analyst ErgoBTC reported that the Chinese wallets associated with the scam had been inactive for nearly three years since 2021, but have recently been moving funds. PlusToken is a multi-billion dollar Chinese cryptocurrency scam that defrauded a massive 2.6 million users. 2018 and 2019. At the time, local police in China had seized $14 billion worth of BTC, ETH, and other altcoins.
Between 2019 and March 2020, the majority of Bitcoin (BTC) holdings, totaling approximately $1.3 billion, were held. At the time, Bitcoin’s market capitalization was only $160 billion, so this drop was significant.
However, its Ethereum holdings remained untouched until the summer of 2021, when the wallet moved a third of its 840,000 ETH to the unpopular cryptocurrency exchange Bidesk, where it was subsequently sold. The remaining ETH will remain dormant across multiple “mixed” addresses until early August 2024, at which point 542,000 ETH worth approximately $1.3 billion has been consolidated into 294 new addresses, ErgoBTC analysts said. Reported. The analyst further added:
“Given recent efforts to re-obfuscate ETH, it is unlikely that the active distribution of 15.7k ETH moved yesterday is the last of the 540k ETH supply distribution.”
Is Ethereum price facing selling pressure?
The BTC price has been facing significant selling pressure following the German government’s Bitcoin sale in early July this year. Even though the sale price was much higher than BTC market capitalization, it significantly weakened market sentiment.
If the Chinese government succeeds in such a selloff at 542,000 ETH, Ethereum price could face strong selling pressure below $2,000. the current, ETH price It has already fallen 2%, below the $2,400 level.
Earlier this week, crypto analyst Ali Martinez stated that ETH is trading in a roughly symmetrical pattern. Therefore, a fall below $2,300 could lead to another big crash to the $1,800 level.
#Ethereum is trading inside a symmetrical triangle. A series of closes outside the $2,300 to $2,600 range will determine the direction of the stock price. $ETH tendency. pic.twitter.com/8VBATLZugw
— Ali (@ali_charts) October 8, 2024
Furthermore, whale selling of Ethereum by dormant holders has continued over the past week, dampening investor sentiment.
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Bhushan Akolkar
Bhushan is a FinTech enthusiast with a deep understanding of financial markets. His interest in economics and finance led him to focus on the emerging blockchain technology and cryptocurrency market. He is passionate about continuous learning and stays motivated by sharing the knowledge he gains. In his free time, Bhushan enjoys reading thriller fiction novels and sometimes hones his cooking skills.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
