Celsius doesn’t help: it drops $125m in ETH Holdings

In the first two weeks of January, cryptocurrency lending platform Celsius Network sold more than $125 million worth of Ethereum (ETH) stock, hoping to pay creditors as part of ongoing bankruptcy proceedings.

This massive ETH dump, along with the massive amount of Ethereum redemptions recorded over $1.6 billion during the same period, has put selling pressure on Ethereum and sent its price down.

TLDR

The Celsius network sold more than $125 million worth of Ethereum (ETH) between January 8-12 to pay creditors as part of its bankruptcy proceedings, while more than $1.6 billion worth of Ethereum was returned at the same time, the highest Shanghai revision Celsius has yet seen. Ethereum stock – more than 557,000 ETH worth around $1.3 billion The sale of ETH in Celsius put pressure on the price of Ethereum, causing it to fall by 4% below $2,350.

Despite the sale, Celsius still holds significant Ethereum holdings in two wallets — more than 557,000 ETH worth about $1.3 billion. However, the platform continues to auction crypto assets as required by courts to pay off debts. This sale is necessary for bankruptcy proceedings, but it has increased the rate of significant depression in the price of Ethereum, according to market analysts.

Celsius' rise to move Ethereum stocks was first seen with more than $125 million worth of ETH dropped between January 8-12. Then blockchain analytics organizations found two more large transactions – 13,000 ETH deposit ($30 million) to Coinbase and 2,200 ETH ($5 million) to FalconX.

The #Celsius wallet deposited 13K$ETH($30.34M) into #Coinbase and 2,200$ETH($5.13M) into #FalconX again in the last 10 hours.

Currently, 2 #Celsius wallets still hold 557,081$ETH ($1.3B).

Address: pic.twitter.com/E9DIZ9KDAH

— Lookonchain (@lookonchain) January 23, 2024

These high-value transfers from the Celsius wallet indicate the aggressive stance of the financial group to raise capital to meet creditor obligations. However, the resulting selling pressure was greater than the price of Ethereum, which fell 4% below $2,350 last week. The moves pushed ETH below the key demand zone at $2,380 to $2,461, raising further price slide concerns.

Beyond the Celsius move, heavy Ethereum redemptions weighed in. Data shows that more than $1.6 billion worth of Ether has returned amid the Celsius crisis, setting a new record for the year so far. Combined with the Celsius selloff, it created a perfect bear wave that opened the door for ETH to retest the $2,000 zone, according to some analysts.

More data seems to confirm that sales by whales and wealthy investors often slow down and generate more profits for regular ETH holders. This phenomenon feeds on itself, piling on further downward momentum in bear cycles. For now, the reduction in liquidity shows some optimism that markets may stabilize and that Ethereum may bounce back if the selling pressure subsides. But the crypto community is wary of how widespread a problem in Celsius could be for Ethereum.