Ethereum Faces New Challenge as $2 Billion ETH from PlusToken Scam Resurfaces

The recent days have brought a wave of uncertainty to the cryptocurrency market, particularly impacting Ethereum (ETH). The market turbulence began following Japan’s market crash and concerns about a potential U.S. economic downturn.

ETH has been particularly affected by these macroeconomic challenges, exacerbated by the emergence of the PlusToken Ponzi scheme. Analysts have highlighted a significant development involving the movement of Ethereum wallets associated with the PlusToken Ponzi scheme that operated in China from 2018 to 2019.

Chinese authorities previously seized $4 billion in crypto assets linked to the Ponzi scheme. Recently, after a prolonged period of dormancy, these wallets have shown movement. In 2020, Chinese authorities confiscated 833,083 ETH valued at over $2 billion at current market rates. Reports indicate that numerous wallets connected to the PlusToken Ponzi scheme have been active.

Despite initial concerns, further analysis revealed that a substantial portion of the ETH had already been seized, with approximately $63 million worth of ETH in circulation. Conflicting reports emerged, with one source claiming over $450 million in ETH had been on the move in the past 24 hours.

These developments have raised apprehensions among ETH investors, traders, and analysts regarding potential selling pressure. Following the market crash on July 5th, ETH experienced significant price fluctuations, dropping to a low of $2116. The news of potential $2 billion worth of ETH movement has further intensified market uncertainties and selling pressure worries.

Consequently, trading volume decreased by 4.56% to $23.6 billion, and the market cap saw a decline of 3.59% to $291.1 billion. Current data indicates that ETH is trading at $2,421, reflecting a 3.35% decline on daily charts. The market cap has also decreased by 3.79% to $290.8 billion, with trading volume down by 4.05% within the same timeframe.

Technical analysis suggests that the recent price corrections are not solely attributed to the PlusToken movement but are part of broader market trends. Indicators such as RVGI below zero and the relative strength index at 26, signaling oversold conditions, point to strong bearish momentum and significant selling pressure on ETH.

Moreover, data from Cryptoquant reveals a decline in exchange outflow over the past week, indicating that traders are maintaining liquidity for potential selling opportunities. Similarly, a decrease in ETH’s open interest from $14.6 billion to $9.7 billion suggests investors are closing positions amid uncertainties about ETH’s long-term outlook.

In conclusion, while the movement of PlusToken-held ETH has stirred market concerns, ETH was already experiencing a downward trend. The current price dynamics are reflective of broader market conditions rather than isolated incidents related to the Ponzi scheme transfers.