Online reports have revealed that the Chinese government has started moving thousands of Ether (ETH) confiscated from a $4 billion crypto Ponzi scheme. As a result, Ethereum investors have recently shared their concerns about the possibility of a massive sell-off.
Investors fear the upcoming ETH selling frenzy
On Wednesday, user X alarmed that the Chinese government recently transferred the remaining seized Ether from the PlusToken Ponzi scheme for the first time in three years. The addresses storing these tokens are inactive as of 2021.
The first move began in early August, when various wallets associated with the seized crypto assets transferred 2,800 ETH worth approximately $6.5 million to a single wallet, sparking fears of a possible sell-off.
Recent movements of wallets on the chain apparently indicate that the sale process has begun. On Tuesday, the addresses transferred approximately 15,700 ETH between several wallets in an alleged attempt to obfuscate token tracking.
Of the 15,700 ETH, over 7,000 ETH worth approximately $16.7 million was sent to several exchange deposit addresses and was likely sold yesterday.
After the collapse of the PlusToken program, the Chinese government seized crypto assets from the exchange worth approximately $4.2 billion, including 840,000 ETH worth $215 million at the time.
The asset remained largely untouched until 2021, when a third of the seized ETH was sent to the now-closed Bidesk cryptocurrency exchange and allegedly sold. After the alleged sale, ETH was in thousands of “mixed addresses” before being reconsolidated into a up-to-date set of 294 addresses in August.
According to the report, the Chinese government still holds approximately 542,000 ETH worth over $1.3 billion. Additionally, the post noted the massive selling pressure seen during the 2020 government sell-off of seized Bitcoin (BTC), which would amount to “current selling pressure of approximately $10 billion.”
“Given recent efforts to re-obfuscate ETH, active distribution of 15.7k is unlikely. The ETH transferred yesterday was the last of the 540k supply distribution. ETH,” X’s post suggested, reigniting Ethereum investors’ fears about a possible blackout sale.
The Ethereum Foundation is selling again
The Chinese government’s transfers are not the only grave actions that worry investors. On-chain data analytics companies revealed that the Ethereum Foundation recently joined the whale sell-off frenzy.
According to reports, Ethereum Foundation-related wallets moved approximately $3.21 million this week. One of the addresses sent On Tuesday, 1,250 ETH to cryptocurrency exchange Bitstamp, while another linked wallet sold On Wednesday, 100 ETH for 242,828 DAI.
Earlier, Ethereum co-founder Vitalik Buterin explained some of his on-chain activity as it fueled bearish sentiment among investors. Over the past 24 hours, Ethereum has seen a 2% price decline, falling below the $2,400 support level.
Cryptocurrency analyst Ali Martinez summarized Ethereum’s results. Martinez excellent“Every time Ethereum breaks the TD setup resistance trendline, a forceful bull run follows. But when ETH breaks below the TD setup support trendline, we will see an average correction of 53%.
Based on this, the analyst suggested that the next key support level to pay attention to is $2,250, as its loss could result in a significant price decline. At the time of 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
