BTC and ETH’s sharp decline on Monday might be trigger by Chainalysis’ report

Major cryptocurrencies such as Bitcoin and Ethereum took a hit during Monday’s trading with the token losing several percentages of their value in just a matter of minutes. With no fresh leads, traders were initially at a loss on how to explain the plunge but some are now pointing out that the downtrend might be caused by Chainalysis’ recent report.

It all started at 18.28 UTC on Monday, December 16, 2019, Coindesk reported. Seemingly without warning, Bitcoin suffered a 4 percent decline in just seven minutes. The crypto plunged to $6,800 from its previous price of $7,085 or a price decline of $285.

Ethereum was hit even harder. The cryptocurrency’s price declined by 7 percent during the same period. Previously trading, at $140, it dropped to $130 or a price decline of $10 per token. According to Coindesk, such low price levels for both cryptos have never been seen since the temporary selloff on November 25.

People are now pointing their fingers at Chainalysis’s report as the cause of the decline. Published just hours earlier, the report claimed that around 790,000 ETH, roughly worth $102 million, and around 20,000 BTC, with a market value of around $137 million, are in the hands of PlusToken “scammers.”

The reports also claimed that people connected to Plustoken have already sold around $185 million worth of stolen bitcoin. As a result of Beijing’s crackdown, six persons have been arrested in Vanuatu and extradited to China. Chinese investigators said that the company based its Ponzi scheme operations in the South Pacific nation.

Chinese authorities said that the scam raked in around $3 billion worth of cryptocurrency from people who thought of it as an investment opportunity.

Based on Chainalysis data, however, they were only able to track down around $2 billion worth of cryptocurrency. The hoard included 6,400,000 ETH, 180,000 BTC, 50 OMG (OmiseGo) and 111,000 USDT.

A trader believes that Monday’s plunge was likely triggered by fears that PlusToken’s bitcoin and ether might flood the market. “This [Chainalysis post] may have something to do with it, driving a little bit of fear among participants,” an over-the-counter crypto broker he told CoinDesk.