The recent movements of Ethereum (ETH) by Celsius Network have raised concerns about the stability of its price. Celsius, a now-bankrupt crypto lender, has initiated its reimbursement plan by transferring large amounts of ETH to various crypto exchanges. This article analyzes the impact of these transfers and their potential consequences on the Ethereum market.
Celsius Network, which filed for bankruptcy in July 2022, has been actively working towards refunding its creditors. On-chain data reveals that Celsius executed transfers totaling over $125 million worth of ETH last week. The company moved $95.5 million to Coinbase and $29.73 million to FalconX between January 8 and January 12. These transfers indicate an intention to sell off ETH, as Celsius aims to clear its liabilities under the bankruptcy proceedings.
The large-scale selloffs by Celsius Network have the potential to shake market confidence and trigger a sell-off from other investors. Although Ethereum has shown resilience in the past, such significant transfers can create uncertainty and lead to a downward pressure on the price. It is noteworthy that during the time of these transfers, Ethereum displayed a bullish sentiment, with a 23% jump in price from $2,191 on January 8 to $2,706 on January 12. However, the price has declined since then and is currently trading at $2,514.
Despite the recent transfers, Celsius Network still holds a significant amount of various cryptocurrencies. Apart from 584,601 ETH worth $1.47 billion, the company has 9,799 BTC worth $418.2 million and 659 million CEL tokens worth $133.2 million. The decision to continue selling off these assets could potentially have a more profound impact on the price, particularly for Ethereum, which is already testing the $2,500 support level.
The Ethereum market has already shown some response to the recent developments. Coinglass reported liquidations of $23.84 million worth of ETH positions in the past 24 hours. These liquidations indicate a certain level of market volatility and potential selling pressure on Ethereum due to the actions of Celsius Network. Additionally, on-chain data from Spotonchain revealed further transfers of 1,000 ETH worth $2.33 million by FTX and Alameda Research to Coinbase during the same period.
The movement of ETH by Celsius Network raises concerns about the stability of the Ethereum price. The company’s reimbursement plan, fueled by large transfers to crypto exchanges, suggests an intent to sell off ETH. While Ethereum has displayed resilience in the past, such significant selloffs can impact market confidence and lead to further selling pressure. Celsius Network still retains substantial cryptocurrency assets, and any decision to continue selling off these assets could have a profound impact on Ethereum’s price. As Ethereum tests the $2,500 support level, it remains crucial for market participants to closely monitor these developments and assess the potential risks associated with investing in ETH.
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