Celsius Networks, currently in bankruptcy proceedings, has been involved in large Ethereum transactions that are causing unrest in the digital currency space.
Over the past 10 hours, LookonChain on-chain analysts have uncovered notable transfers, including a deposit of 13,000 ETH ($30 million) to Coinbase and an additional 2,200 ETH ($5 million) to FalconX. These transactions demonstrate Celsius' proactive stance in addressing current financial challenges.
Celsius sells $125 million worth of ETH, maintaining $1.3 billion in reserve
From January 8 to January 12, Celsius sold more than $125 million worth of Ethereum (ETH) coins, according to Arkham Intelligence. The main purpose of this auction is to pay off creditors.
Dune Analytics also identified a more widespread redemption pattern, with over $1.6 billion of Ethereum stake redeemed during the same period. The number of redemptions recorded in Shanghai is the highest since last year's update.
— Lookonchain (@lookonchain) January 23, 2024
Despite the financial restrictions imposed by the court, Celsius still has a significant reserve of Ethereum. This reserve amounts to over 557,000 coins across two staking wallets totaling approximately $1.3 billion. The size of this reserve complicates Celsius' current financial situation and highlights an evolving story in the cryptocurrency space.
As part of its obligations to creditors, Celsius is actively liquidating its Ethereum holdings. These auctions, aimed at repaying outstanding debt, are an integral part of Celsius' bankruptcy proceedings.
The market reacted to these Ethereum transactions, causing the price of ETH to decline by 4%. The cryptocurrency fell below the $2,350 mark, causing concern among analysts, especially as ETH is now hovering below its critical demand zone of $2,380 to $2,461.
Analysts predict that failure to maintain this level could lead to a potential retreat towards the $2,000 mark.
Ethereum is currently trading at $2307.2 on the daily chart: TradingView.com
Rich Investors Launch Profit Taking on Ethereum
Historical data from Santiment shows that significant transactions by wealthy investors, commonly known as whales, often trigger profit-making activity among ordinary ETH holders. This phenomenon increases selling pressure and pushes prices down.
Meanwhile, lower funding rates suggest underlying optimism in the market, hinting at a possible cooling in previously overheated perpetual markets. This situation leaves room for ETH to recover once the selling pressure subsides.
As the Celsius bankruptcy drama unfolds, controls on Ethereum transactions and related market dynamics will continue. Investors and observers are closely monitoring the situation, eagerly awaiting further developments and anticipating broader implications for both Celsius and the cryptocurrency ecosystem.