Celsius Network, a now-bankrupt crypto lender, has recently initiated its reimbursement plan for its creditors, which could potentially destabilize the Ethereum price movement. On-chain data obtained from crypto market intelligence company Arkham Intelligence reveals that Celsius Network transferred over $125 million worth of ETH to various crypto exchanges in the past week. The transfers consisted of $95.5 million to Coinbase and $29.73 million to FalconX. Currently, Celsius Network holds 584,601 ETH, 9,799 BTC, and 659 million CEL tokens on its balance sheet, clearly indicating its intention to address its liabilities under bankruptcy proceedings. The sudden influx of ETH on exchanges raises concerns about a potential selloff and its impact on the market.
Celsius Network filed for bankruptcy in July 2022 following the collapse of TerraUSD and the LUNA ecosystem. As a result, creditors had their funds locked on the platform for the past 18 months. However, the defunct crypto lender has been actively working to refund its creditors during the bankruptcy proceedings. In December 2023, Celsius sold $240 million worth of ETH, and on January 5, it announced the decision to unstake $465 million worth of Ethereum, which will be distributed to the creditors.
Despite the significant selloffs by Celsius Network, Ethereum has continued to display its strength and resilience in the market. Over the past seven days, ETH has recorded a 13% gain, indicating bullish sentiment. However, large-scale selloffs like these often lead to a loss of market confidence, potentially triggering sell-offs from other investors as well. It is worth noting that Ethereum experienced a 23% surge in price from $2,191 on January 8 to $2,706 on January 12, coinciding with the time of Celsius Network’s transfers. Currently, Ethereum is trading at $2,514, and recent data from Coinglass shows that $23.84 million worth of ETH positions were liquidated in the past 24 hours.
Celsius Network still retains significant cryptocurrency assets, including ETH, BTC, MATIC, and LINK. The decision to continue selling off these assets could potentially have a significant impact on the price of Ethereum, especially since it is currently testing the $2,500 support level. If Celsius were to unload a large amount of ETH, it could create downward pressure on the price, triggering a further decline. Additionally, Spotonchain data reported that 1,000 ETH worth $2.33 million were moved by FTX and Alameda Research to Coinbase during the same week as Celsius Network’s transfers, further indicating potential selling pressure.
The recent ETH transfers by Celsius Network as part of its reimbursement plan have raised concerns about the stability of the Ethereum price. The influx of ETH on exchanges suggests an intending selloff, which could lead to a loss of market confidence and trigger sell-offs from other investors. While Ethereum has displayed resilience in the face of these transfers, the potential impact on its price cannot be overlooked. Celsius Network’s decision to continue selling off its assets, combined with other large transfers on the market, could exert downward pressure on the price of Ethereum. As the situation unfolds, investors should carefully monitor market conditions and conduct thorough research before making any investment decisions.
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