NOIDA (CoinChapter.com) — Ethereum’s price had a bearish time in the week beginning Oct. 7 as the ETH USD pair moved laterally between $2,350 and $2,500. Recent on-chain data revealed the movement of over 7,000 ETH, valued at around $16.7 million, to exchanges.
The speculation triggered concerns about an incoming liquidation from the infamous PlusToken Ponzi scheme. Traders fear further sell-offs on the horizon that could depress ETH prices.
PlusToken’s ETH Liquidation: A Bearish Catalyst
OXT Research speculated that reawakening Ethereum tokens linked to the PlusToken scheme would significantly lower ETH prices.
The PlusToken scheme, which scammed millions of investors, accumulated vast sums of BTC and ETH, with Chinese authorities seizing these assets in 2020. The scheme liquidated most of Bitcoin between 2019 and 2020 but left much of ETH untouched until now.
Recent data that OXT Research shared on X show that the BTC liquidation from Aug. 2019 to March 2020 saw over $1.3 billion worth of BTC sold into the market, contributing to a significant dip in Bitcoin prices.
Similar sell-off patterns are emerging for Ethereum now. The BTC distributed vs. price chart indicates a steep correlation between heavy distribution and falling prices. This suggests that Ethereum may follow the same downward path if the liquidation of ETH continues.
Moreover, the recent 7,000 ETH transfer to exchanges could likely signal the beginning of sustained sell pressure. The post speculates a steep correlation between heavy sell-offs and falling prices.
With 542,000 ETH still sitting in PlusToken-linked wallets, the ongoing liquidation poses a strong bearish cue for Ethereum’s price, especially if more transfers follow the pattern set by the Bitcoin sell-off.
ETH Price Technicals Add To The Doom And Gloom
Adding to the woes of the ETH USD pair is a technical setup called the ‘descending triangle.’
Analysts identify the descending triangle as a bearish continuation pattern, characterized by a descending upper trendline that compresses price action into lower highs, while a flat lower trendline provides weakening support.
This setup intensifies selling pressure as rallies struggle to breach resistance, leading to progressively weaker buyer attempts. Moreover, the battle between bulls and bears typically ends with a breakdown below the lower trendline.
Traders estimate the potential downside by measuring the vertical distance from the highest point of the triangle to the flat support line, projecting this distance downward from the breakout point.
If the Ethereum token confirms the pattern, it could drop nearly 51%, with a target near $1,200.
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