The Potential Impact of PlusToken-Linked Ethereum Sell-off on Ethereum Price
Investors are on edge as fears grow over a potential sell-off of 542,000 ETH seized in the PlusToken ponzi scheme, which could trigger another significant price crash of up to 53% for Ethereum. Recent movements of these funds have raised concerns that a massive liquidation could push the price of Ethereum below $2,000, further impacting the Market.
Chinese Government Selling PlusToken-Linked Ethereum
PlusToken, a notorious Crypto scam that operated in 2018 and 2019, affected approximately 2.6 million investors before collapsing. Chinese authorities seized over $14 billion worth of cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), following the scam's downfall. These seized funds remained dormant for nearly three years until recent transfers raised speculation about the Chinese government offloading a substantial portion of its Ethereum holdings.
The recent transfer involves a total of 542,000 ETH, valued at around $1.3 billion, confiscated during the PlusToken investigation. Previous liquidations of seized Bitcoin resulted in significant downward pressure on the market, with over $1.3 billion in BTC sold between 2019 and early 2020. However, Ethereum holdings had remained largely untouched until mid-2021, when a portion of the ETH was moved to an Exchange and sold, while the remaining funds were Distributed across various addresses.
The movement of 7,000 ETH from PlusToken-linked Wallets has sparked concern among investors that this could be a prelude to a larger sell-off. Analysts suggest that the Chinese government's decision to sell its Ethereum holdings could lead to substantial selling pressure, potentially impacting the price of the Cryptocurrency.
Ethereum Price To Drop?
Investor sentiment has been negatively affected by the prospect of a significant Ethereum sell-off, with fears that the price could plummet below $2,000. Recent reports indicate that inactive Ethereum whale holders have also started selling their holdings, adding to the selling pressure and raising concerns about further declines in price.
Additionally, ETH's long liquidations have amounted to $27.72 million in the last 24 hours, as per Coinglass Data. This additional selling pressure is expected to contribute to further price movements. Analysts warn that if Ethereum's price falls below $2,250, it could trigger a significant decline of up to 53% from that point onwards.
Each time Ethereum breaks above the TD setup resistance trendline, a strong bull run follows. But when ETH breaks below the TD setup support trendline, we've seen an average 53% correction. The key support now is $2,250—losing it could trigger a significant price drop.
— Ali (@ali_charts)
Conclusion
The potential sell-off of the 542,000 ETH linked to the PlusToken ponzi scheme has raised concerns among investors about the impact on Ethereum's price. With fears of a significant decline looming, market participants are closely monitoring the situation to assess the potential implications of the Chinese government's decision to liquidate its Ethereum holdings.
As the market continues to exhibit downward pressure, investors are advised to exercise caution and stay informed about developments that could impact the price of Ethereum. The next few weeks are crucial as the market awaits further clarity on the fate of the seized ETH and its potential effects on the overall Cryptocurrency ecosystem.
