Chinese authorities have recently made a significant move in the cryptocurrency market by transferring 7,000 ETH to exchanges within the last 24 hours. These coins are part of the 542,000 ETH that was seized from a crypto Ponzi scheme back in 2018. This development has raised concerns among Ethereum holders as it could potentially lead to a large sell-off in the market.
At the time of writing, Ethereum (ETH) was trading at $2,401 after experiencing a nearly 2% price drop over the past 24 hours. This price decline coincided with a general bearish sentiment across the broader cryptocurrency market, with the Fear and Greed Index hitting a seven-day low of 39, indicating that traders are currently in a state of fear.
The unexpected movement of 7,000 ETH to exchanges has created a supply overhang for Ethereum, as highlighted by onchain researcher ErgoBTC. These tokens are part of the 542,000 ETH that was seized from the PlusToken crypto Ponzi scheme in 2018. The scheme had amassed a significant amount of Bitcoin and ETH before being shut down, with most of the Bitcoin being sold off in 2019 and 2020, and a portion of the ETH being liquidated in 2021.
The remaining balance of 542,000 ETH was consolidated in multiple addresses in August 2024, and it appears that some of these coins are now being moved. On October 9th, 15,700 ETH was withdrawn from these addresses, with nearly half of it being deposited into the BitGet, Binance, and OKX exchanges. This transfer pattern is reminiscent of when the authorities sold off Bitcoin in 2020, signaling a potential increase in selling pressure for Ethereum in the coming weeks.
The influx of ETH onto exchanges has caused a spike in Ethereum exchange reserves, reaching a three-week high as observed on CryptoQuant. Over the past 24 hours, the total number of ETH held on exchanges has increased by more than 110,000 tokens, indicating that many traders are preparing to sell their holdings. The highest increase in reserves was seen on derivative exchanges, which could lead to heightened volatility in the Ethereum market.
Data from IntoTheBlock also shows a surge in large transaction volumes, suggesting increased whale activity in the market. However, despite this uptick in large transactions, Ethereum’s price has not seen significant gains, indicating that these transactions may be on the sell side rather than the buy side.
The high volume of ETH deposits on exchanges has had a bearish impact on Ethereum’s price, with Coinglass reporting over $31 million worth of ETH being liquidated in the last 24 hours, with $27 million coming from long liquidations. This development has put Ethereum holders on edge as they brace for a potential sell-off of the seized 542,000 ETH by Chinese authorities, which could further impact the cryptocurrency’s price and market dynamics. The world of technology is constantly evolving, with new innovations and advancements being made every day. One of the most exciting developments in recent years has been the rise of artificial intelligence (AI) and machine learning. These technologies have the potential to revolutionize industries across the board, from healthcare to finance to transportation.
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