Ethereum (ETH) has been one of the many victims of the recent widespread sell-off in the crypto markets, which was sparked when Bitcoin faced a sharp drop that sent it to lows of roughly $9,500.

This latest drop has sent Ethereum reeling down 10% to a major support level at $185, and this latest drop may have been perpetuated by a Chinese Ponzi scheme that scammed a total of 800,000 ETH from unsuspecting investors.

Ethereum Plummets to $185 as Selling Pressure Increases

At the time of writing, Ethereum is trading down just under 10% at its current price of $185, which marks a significant drop from its 24-hour highs of over $200.

ETH’s recent leg down came about as the entire crypto market faced a massive sell-off, which caused many altcoins to dump 10% or more.

This drop came about just prior to Bitcoin facing a period of capitulation that led it to lows of $9,500. BTC has since recovered from this drop and is now trading above the key psychological price level of $10,000.

In spite of Bitcoin’s recovery, most altcoins are still trading at or just above their 24-hour lows, with Ethereum posting a minor recovery from its daily lows of just over $176.

Additionally, Ethereum’s recent sell-off and failure to recover has caused it to shed even more off of its market dominance, which is currently at 7.55%, down from its monthly highs of nearly 9%.

Is a Chinese Ponzi Scheme Behind the Recent ETH Dump?

Recently, news broke that a Chinese Ponzi scheme had swindled investors out of a significant amount of Bitcoin and Ethereum, which has sparked widespread concerns that the perpetrators will at some point dump the 800,000 ETH they currently have.

Dovey Wan, a founding partner at Primitive Crypto, spoke about this scam and their wallet holdings in a recent tweet, noting that they currently have 70,000 Bitcoin and 800,000 Ethereum, which may ultimately be dumped onto the fragile markets.

“JUST IN: as per sir @loomdart‘s request, this thread is abt the on-going sells off made by PLUS Token, the biggest Chinese PONZI which scammed ~70K $BTC + ~ 800K $ETH. I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells,” she noted.

JUST IN as per sir @loomdart ‘s request, this thread is abt the on-going sells off made by PLUS Token, the biggest Chinese PONZI which scammed ~70K $BTC + ~ 800K $ETH I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells pic.twitter.com/uIjgrzwHET — Dovey 以德服人 Wan ?? (@DoveyWan) August 14, 2019

Although it remains unclear as to whether or not this massive amount of Ethereum existing in the hands of known scammers contributed to yesterday’s drop, it is highly likely that the cryptocurrency could soon face a massive panic sell-off that is perpetuated by any movement in the scammer’s wallets.

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