Online reports have revealed that the Chinese government has begun moving thousands of ether (ETH) seized from a $4 billion cryptocurrency Ponzi scheme. As a result, Ethereum investors have recently shared concerns about the possibility of a large-scale selloff.
Investors are concerned about future ETH selling sprees
On Wednesday, an X user warned that the Chinese government recently moved the remaining seized ether from the PlusToken Ponzi scheme for the first time in three years. The addresses holding these tokens have been dormant since 2021.
The first movement began in early August, when 2,800 ETH worth approximately $6.5 million was transferred from various wallets associated with the seized crypto assets to a single wallet, raising concerns about a possible sale. .
The wallet’s recent on-chain movements seem to indicate that the sale process has begun. On Tuesday, these addresses allegedly transferred approximately 15,700 ETH between multiple wallets in an attempt to obfuscate tracking of the tokens.
Of the 15,700 ETH, over 7,000 ETH worth approximately $16.7 million was transferred to multiple exchange deposit addresses and was likely sold yesterday.
After the collapse of the PlusToken scheme, the Chinese government seized approximately $4.2 billion in crypto assets from the exchange, including 840,000 ETH (worth $215 million at the time).
The assets remained largely untouched until 2021, when one-third of the seized ETH was allegedly transferred to the now-closed cryptocurrency exchange Bidesk and sold. After the putative sale, ETH was stored in thousands of “mixed addresses” until it was reintegrated into a new set of 294 addresses in August of this year.
According to the report, the Chinese government still holds about 542,000 ETH, worth more than $1.3 billion. Additionally, the post notes the massive selling pressure seen in 2020 when governments sold off seized Bitcoin (BTC), which was “the equivalent of approximately $10 billion today. “There will be selling pressure,” he said.
“Given recent efforts to re-obfuscate ETH, the 15.7k ETH active distribution moved yesterday is unlikely to be the last of the 540,000 ETH supply distribution,” XPost suggested, adding that the This has reignited Ethereum investors' concerns about the possibility. off.
Ethereum Foundation sells again
Chinese government transfers are not the only major move to alarm investors. The on-chain data analysis firm revealed that the Ethereum Foundation recently joined the whale sales frenzy.
According to reports, wallets linked to the Ethereum Foundation saw approximately $3.21 million in movement this week. One of the addresses sent 1,250 ETH to cryptocurrency exchange Bitstamp on Tuesday, and another associated wallet sold 100 ETH for 242,828 DAI on Wednesday.
Previously, Ethereum co-founder Vitalik Buterin disclosed some of his on-chain activities for fueling bearish sentiment among investors. Over the past 24 hours, Ethereum price has fallen by 2% and fallen below the $2,400 support level.
Crypto analyst Ali Martinez gave his opinion on Ethereum’s performance. Martinez said, “Every time Ethereum breaks above the TD setup resistance trend line, a strong bull run ensues. However, whenever ETH breaks below the TD setup support trend line, we see an average correction of 53%.”
Based on this, the analyst suggested that the next important support level to look out for is $2,250, a loss of which could trigger a significant price decline. As of this writing, ETH is trading at $2,383.
Ethereum's performance in the three-day chart. Source: ETHUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com
