Embattled crypto lending platform Celsius Network sold over $125 million of its Ethereum (ETH) reserves in the first two weeks of January, hoping to repay creditors as part of ongoing bankruptcy proceedings.
This massive ETH dump, alongside record high levels of staked Ethereum redemptions over $1.6 billion in the same period, has piled selling pressure on Ethereum and caused its price to decline.
TLDR
Celsius Network sold over $125 million worth of Ethereum (ETH) between January 8-12 to repay creditors as part of their bankruptcy proceedings
Over $1.6 billion of staked Ethereum was redeemed in the same period, the highest amount since the Shanghai upgrade
Celsius still holds substantial Ethereum reserves – over 557,000 ETH worth around $1.3 billion
The selling of ETH by Celsius has added pressure on Ethereum’s price, causing it to decline 4% below $2,350
Wealthy investor selling often triggers further ETH selling by regular holders, intensifying price declines
Despite the sales, Celsius still holds substantial Ethereum reserves in two staking wallets – over 557,000 ETH worth approximately $1.3 billion. However, the platform has continued auctions of its crypto assets as required by the courts to pay off debts. This selling, while necessary for bankruptcy proceedings, has added significant bearish momentum on Ethereum’s price according to market analysts.
The increased activity by Celsius in moving its Ethereum reserves first showed up between January 8-12 when over $125 million ETH was offloaded. Then blockchain analytics firms detected two more large transactions – a 13,000 ETH deposit ($30 million) to Coinbase and 2,200 ETH ($5 million) to FalconX.
The #Celsius wallet deposited 13K $ETH($30.34M) to #Coinbase and 2,200 $ETH($5.13M) to #FalconX again in the past 10 hours.
Currently, 2 staking wallets of #Celsius still hold 557,081 $ETH($1.3B).
Address:https://t.co/3gGOucC9gYhttps://t.co/zodN4gzVHKhttps://t.co/Jjt9fCN2Ej pic.twitter.com/E9DIZ9KDAH
— Lookonchain (@lookonchain) January 23, 2024
These high-value transfers out of Celsius wallets point to an aggressive stance by its financial team to raise capital to address creditor obligations. However, the resultant selling pressure was more than Ethereum’s price could handle, declining 4% below the $2,350 level last week. The moves also pushed ETH below a key demand zone between $2,380 to $2,461, sparking further price slide concerns.
Beyond Celsius’ activities, heavy Ethereum redemptions also weighed on price. Data revealed over $1.6 billion worth of staked Ether was redeemed amidst the Celsius crisis, setting a new record high for the year so far. Combined with Celsius’ sales, it created the perfect bearish storm that opened the gates for ETH to retest the $2,000 zone according to some analysts.
Santiment data further seemed to confirm that sell-offs by whales and wealthy investors often trickle down, triggering further profit-taking by regular ETH holders. This phenomenon feeds on itself, piling on additional downward momentum in bear cycles. For now, decreasing funding rates signals some optimism that markets can stabilize and Ethereum can bounce back if selling pressure recedes. But the crypto community remains cautious on how broader troubles at Celsius could continue impacting Ethereum.
The post Celsius Not Helping Either: Dumps $125m in ETH Holdings appeared first on Blockonomi.
