Yesterday was an overwhelmingly bullish day for the cryptocurrency markets, with Bitcoin posting a large surge from its lows of $6,400 that led Ethereum (ETH) and most other major altcoins to climb as much as 10%.
This upwards momentum was somewhat fleeting however, and Ethereum’s retrace from its recent rally may stem from the ongoing sale of ETH from the ring leaders on the defunct PlusToken Ponzi scheme, which could significantly damage the crypto’s price for years to come.
Ethereum Rally Stalls as PlusToken Moves ETH Holdings
At the time of writing, Ethereum is trading down marginally at its current price of $127, which marks a notable decline from its daily highs of $134 that were set at the peak of the recent rally experienced by the aggregated crypto markets.
This rally, and subsequent retrace, has largely been guided by Bitcoin, which surged all the way up to $7,500 yesterday before losing its strength and dropping back down to $7,150.
One factor that perpetuated ETH’s retrace and could signal that it will soon see significantly further losses is the fact that the now defunct Chinese Ponzi scheme – PlusToken – reportedly has hundreds of thousands of Ethereum that they are offloading directly onto the markets.
A recent tweet from Whale Alert noted that 789,525 ETH was transferred from a PlusToken wallet to an unknown wallet, signaling that they may be looking to market sell all, or a portion, of these tokens.
“789,525 #ETH (105,099,509 USD) transferred from PlusToken to unknown wallet,” they pointed out.
Will PlusToken Ravage ETH’s Fundamental Strength for Years to Come?
The massive amount of Ethereum held by the ring leaders behind the PlusToken scheme may provide significant downwards pressure on ETH’s price for years to come, suppressing any potential bullishness and engaging in manipulative trading.
Su Zhu, the CEO of Three Arrows Capital, mused this possibility in a recent tweet, explaining that they could effectively manipulate the markets surrounding ETH forever with their massive holdings.
“The PlusToken scammers’ social media account in China now claims credit for the movement. What if they just use their $ETH transactions to PnD the market forever? ‘hi, who wants to buy 200k eth from me?’ ‘brb, about to go lvg long eth on DeFi’ ‘10k eth to tornado, actually nvm’” he noted while referencing a video where one of the PlusToken scammers attempts to explain their token transactions.
Although the market’s reaction to the potentially bearish developments surrounding Ethereum have been tempered thus far, it is a possibility that this fundamental bearishness will generate massive fear amongst investors and possibly lead to a prolonged bear market.