Top Cryptocurrencies Face Trouble as PlusToken Dumps on the Market
The cryptocurrency market could be preparing for a sell-off as the PlusToken Ponzi starts to dump a massive number of tokens.
Key Takeaways
- Investors fear about what the future may hold following a $460 million transaction made by addresses connected to PlusToken.
- Historical data suggests that every time the individuals behind this scam off-load their stolen tokens, the market tends to crash.
- If history repeats itself, Bitcoin could plummet to $7,700, Ethereum to $200, XRP to $0.16, and EOS to $2.
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Roughly $460 million in Bitcoin, Ethereum, XRP, and EOS have been transferred to different addresses over the past week by the multi-billion dollar PlusToken Ponzi.
PlusToken Ponzi Prepares to Dump
The transactions stoked fear among market participants due to PlusToken’s activity in the past.
Based on historical data, there is a strong correlation between downward price action and PlusToken’s off-loading procedure.
The last time the perpetrators of this scam moved a significant number of tokens was back in mid-February. Approximately 12,000 BTC, worth $117 million at the time, were transferred to an unknown address associated with mixer deposits.
Following the transaction, nearly $200 billion were wiped out of the entire market capitalization within one month.
Now that 22,000 BTC, 790,000 ETH, 20 million XRP, and 26 million EOS are on the move, commentators wonder whether or not the market will be able to absorb such a massive selling pressure.
This week the following #PlusToken funds have been on the move to exchanges and new addresses for mixing:
– 22k BTC ($203m USD)
– 789k ETH ($183m)
– 26m EOS ($68m)
– 20m XRP ($4m)The big question: can the crypto markets absorb this volume or are we headed lower?
— Spencer Noon 🕛 (@spencernoon) June 25, 2020
From a fundamental perspective, everything seems to indicate that the market is on the cusp of entering the next bullish cycle.
However, different chart patterns suggest that these cryptocurrencies sit on top of critical support levels that will define the next significant price movement.
Support Levels to Watch
Bitcoin has been trading within an ascending triangle since early May. This technical formation is considered a continuation pattern that estimates an 18.5% target upon the breakout point.
Breaking below the support provided by the hypothenuse of the triangle will likely spark an increase in sell orders behind the flagship cryptocurrency. Under such conditions, Bitcoin could drop to $7,700 or lower based on the technical pattern shown below.
Along the same lines, Ethereum’s price action has been contained within a parallel channel since the beginning of the month. By drawing a parallel line equal to the width of the channel, it is reasonable to assume that moving past the $225 support level would be catastrophic for the bulls.
Such a downswing might have the strength to send the smart contracts giant down to $200.
On the other hand, Ripple’s XRP seems to have already broken below a critical support wall that was holding its price since mid-May. While it appears that this altcoin is trying to regain the 38.2% Fibonacci retracement level as support, rejection from this barrier could invalidate this scenario.
On its way down down, the cross-border remittances token may find support around the 50% or 61.8% Fibonacci retracement level. These support hurdles sit at $0.17 and $0.16, respectively.
Finally, EOS’ price action is currently behaving similarly to Ether in the sense that it has also been contained within a parallel channel for an extended period. In the event of a sell-off, EOS may have the ability to break below the $2.4 support level.
If this were to happen, investors must prepare for a steep decline as the probabilities for a drop towards $2 increase exponentially.
The Virtue of Patience
The recent transactions made by the PlusToken Ponzi are certainly a reason for anyone who has some skin in the game to be concerned. Still, the different technical patterns previously mentioned offer an ambiguous outlook for each cryptocurrency that depends on whether the bulls or the bears step in.
If Bitcoin breaks above $10,000, it would likely shoot up to $12,000, while Ethereum could rise to $300 if it moves past the $250 resistance level. XRP might surge to $0.20 if it can regain the 38.2% Fibonacci retracement level as support. And EOS would have to break the $2.85 barrier before climbing to $3.40.
Given the ambiguity, it is imperative to wait for a clear break of any of the support and resistance levels mentioned above to have a clear idea of the direction of the market’s trend. Those who enter long or short positions too early could suffer the consequences of an adverse price movement.
It is worth remembering that patience is a virtue that separates successful investors from unsuccessful ones. And under the current market conditions, self-control can prove to be a profitable strategy.
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