Around 7,000 ETH that were seized by the Chinese government in the past have been moved to an exchange in the last 24 hours, signaling an intention of offloading and selling.
For background, PlusToken was an MLM cryptocurrency ponzi scheme that started in early 2018 and was worth billions of dollars. The plan was in place until June 2019 when Chinese authorities detained the scheme’s masterminds.
The offloading, however, comes at a time when the price of Ethereum is down nearly 1.5%, as compared to the same time last day.
These ETHs had been previously transacted at the beginning of August this year, after being seized for the first time since 2021. The Chinese authorities had taken the Ethereum possession from the multibillion-dollar PlusToken fraud.
These 7,000 ETH are a part of the remaining 542k ETH worth around $1.3 billion.
What Was The Chinese PlusToken Ponzi Scheme?
The PlusToken scam pertained to cryptocurrency mining, a somewhat novel investing approach that is not well-known or comprehended by the general public.
The victims thought they had discovered a lucrative new venture. In actuality, they were profiting from the most recent victims of the scam while also providing money to criminals.
Will ETH Plumet Due To This Offloading?
PlusToken BTC clusters had weekly inflows of over 10k BTC at its height, amounting to a noteworthy over $85 million at that time. The scheme had collected 830k Ethereum worth $215 million and 194k Bitcoin worth $2 billion by the time it was closed.
The current distribution of ETH is expected to eventually sell all $1.3 billion of the cryptocurrency, following the same pattern of attempted obfuscation as that of BTC in 2019. This newly noticed tendency presents Ethereum with a brand-new, unanticipated supply overhang.
Even the technical indicators for Ethereum indicate that the current mood is bearish, and the Fear & Greed Index is currently reading 39 (Fear). Over the previous 30 days, Ethereum experienced 4.90% price volatility and 15/30 (or 50%) green days.
Data also indicates that there is an overall bearish mood for Ethereum price prediction, with 4 technical analysis indicators indicating bullish signs and 25 indicating bearish signals.