Ethereum Price Dips as PlusToken-linked Wallets Show Activity

TLDR

Chinese government moved 7,000 ETH ($16.7 million) seized from PlusToken scam
Speculation arises about potential sale of remaining 542,000 ETH ($1.3 billion)
Ethereum price under pressure, trading below $2,400
PlusToken wallets dormant for 3 years have begun moving funds
Analysts warn of possible larger selloff if Chinese government liquidates holdings

The cryptocurrency market is closely watching developments surrounding Ethereum (ETH) as the Chinese government has reportedly begun selling digital assets seized from the PlusToken scam.

Recent movements of 7,000 ETH, worth approximately $16.7 million, from wallets associated with the fraudulent scheme have sparked concerns about potential market impacts.

PlusToken, a Chinese Ponzi scheme that defrauded about 2.6 million users in 2018 and 2019, resulted in the confiscation of $14 billion worth of various cryptocurrencies by Chinese authorities.

While a significant portion of seized Bitcoin was sold between 2019 and 2020, the Ethereum holdings remained largely untouched until recently.

According to analyst ErgoBTC from OXT Research, wallets linked to the PlusToken case have shown activity after nearly three years of dormancy.

In early August, the remnants of ETH seized from the multibillion dollar PlusToken scheme awoke on-chain for the first time since 2021.

Over the last 24h about 7k ETH of the remaining 542k ETH ($1.3b) was sent to exchanges indicating intent to begin selling the remaining tokens. pic.twitter.com/tu2o7y4o4L

— ∴FreeSamourai∴ (@ErgoBTC) October 9, 2024

In the summer of 2021, approximately one-third of 840,000 ETH was transferred to a lesser-known crypto exchange called Bidesk and subsequently sold. The remaining Ethereum stayed inactive across multiple ‘mixing’ addresses until early August 2024.

The recent movement of funds has raised speculation about the fate of the remaining 542,000 ETH, valued at roughly $1.3 billion.

This substantial amount was reportedly consolidated into 294 new addresses, suggesting preparation for potential distribution or sale.

The cryptocurrency community is particularly concerned about the market impact if the Chinese government decides to liquidate the entire ETH holdings from the PlusToken case.

Such a large-scale sell-off could exert significant downward pressure on Ethereum’s price, which is already showing signs of weakness.

Currently, Ethereum is trading below the $2,400 mark, having experienced a 2% decline in recent hours. The price movement aligns with broader market trends and growing uncertainty surrounding the potential influx of seized assets into the market.

Crypto analyst Ali Martinez noted that Ethereum has been trading in a symmetrical triangle pattern. He suggests that a sustained close below $2,300 could trigger a more substantial drop, potentially reaching the $1,800 level. This technical analysis adds to the market’s cautious sentiment.

#Ethereum is trading inside a symmetrical triangle! A sustained close outside of the $2,300 – $2,600 range will determine the direction of $ETH trend. pic.twitter.com/8VBATLZugw

— Ali (@ali_charts) October 8, 2024

The PlusToken case serves as a reminder of the lasting effects that large-scale cryptocurrency scams can have on the market.

In 2019 and early 2020, when Chinese authorities sold approximately $1.3 billion worth of seized Bitcoin, the impact was notable given Bitcoin’s smaller market capitalization at the time.