Chinese Government’s $542k Ethereum Sell-Off Sparks ETH Price Drop

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Following the Bitcoin (BTC) dip to $61k, which influenced a similar move on most altcoins, Ethereum (ETH) price dropped around 2 percent in the past 24 hours to trade about $2,394 on Thursday, October 10, during the mid-London session. The large-cap altcoin, with a fully diluted valuation of about $288 billion and a daily average traded volume of around $14.2 billion, has been forming a potential reversal pattern in the past three months. 

Ethereum Faces Fundamentals Hindrances

The Ethereum market is expected to absorb more selling pressures from the Chinese government as it prepares to sell the remaining 542k Ether seized from the Plustoken ponzi scam. According to on-chain data analysis, the Chinese government transferred 15.7k Ether to a different wallet address. 

Additionally, the Chinese government deposited a total of 7k Ethee coins to crypto exchanges, presumably for sale. Consequently, experts believe that the Chinese government is more likely to sell more Ether coins in the near future.

The Ethereum network has faced immense selling pressure amid low demand from institutional investors. 

In addition to the notable sales by the Ethereum Foundation, the US spot Ether ETFs have registered a net cash outflow of over $561 million since the official approval.

Midterm Expectations

From a technical standpoint, Ethereum price has been forming a potential symmetrical triangular pattern, which often leads to a bullish rebound. From a different perspective, Ether’s price in the daily time frame has been forming a potential inverted head and shoulders (H&S), coupled with bullish divergence on the Relative Strength Index.

With more than 28 percent of Ether’s circulating supply already locked for staking to secure the network, Ethereum’s price is well positioned for a bullish rebound before the end of this year.