In the wake of the recent launch of a Bitcoin ETF, the Ethereum price has been performing well. However, an unsettling development has come to light that threatens to disrupt the price movement. Celsius Network, the now-bankrupt crypto lender, has commenced its reimbursement plan to creditors, as evidenced by the movement of its ETH holdings to various crypto exchanges. The on-chain data collected by Arkham Intelligence, a crypto market intelligence company, points to transfers totaling over $125 million worth of ETH carried out by Celsius Network last week. This includes significant transfers of $95.5 million to Coinbase and $29.73 million to FalconX between January 8 and January 12. At present, Celsius Network holds a balance sheet with 584,601 ETH worth $1.47 billion, alongside 9,799 BTC worth $418.2 million and 659 million CEL tokens worth $133.2 million. Such transfer activities indicate an opportunity seized by Celsius to offload a substantial amount of ETH during ETF Week.
The motive behind Celsius Network’s transfers to crypto exchanges can be seen as nothing other than an intent to sell off the assets. The company is diligently working towards fulfilling its obligations under bankruptcy proceedings. Celsius filed for bankruptcy in July 2022 after the fall of TerraUSD and the LUNA ecosystem, leaving creditors unable to access their funds on the platform over the past 18 months. Nevertheless, the defunct crypto lender has been taking significant steps to repay its creditors in the course of the bankruptcy proceedings. It was reported that the company sold $240 million worth of ETH in December 2023. Furthermore, on January 5, Celsius communicated its decision to unstake $465 million worth of Ethereum, which would then be distributed to creditors.
Ethereum’s Resilience Amidst Obstacles
The current market sentiment surrounding Ethereum remains positive, with the cryptocurrency recording a 13% gain over the past seven days. While large-scale sell-offs like the one initiated by Celsius Network can instill doubt in investors, Ethereum has proven its resilience time and again. Notably, throughout the period of these transfers, Ethereum maintained its bullish sentiment, as its price surged by 23% from $2,191 on January 8 to $2,706 on January 12. However, the Ethereum price has experienced a decline since then, currently trading at $2,514. Recent data from Coinglass indicates that $23.84 million worth of ETH positions were liquidated within the past 24 hours. Although Celsius still possesses significant cryptocurrency assets, including ETH, BTC, MATIC, and LINK, a strategic decision to continue selling off these assets could potentially harm the price of Ethereum, particularly as it tests the $2,500 support level.
The specific transfers executed by Celsius Network are not the only noteworthy movements within the cryptocurrency market. Spotonchain, an on-chain data provider, reported the transfer of 1,000 ETH worth $2.33 million by FTX and Alameda Research to Coinbase during the same week. Thus, it appears that various market participants are taking advantage of the prevailing market conditions to shift their cryptocurrency assets. While Celsius Network’s actions contribute to market uncertainty, other entities and their movements should not be overlooked. These transactions, combined with Celsius Network’s substantial ETH offloading, could indeed have a substantial impact on the price of Ethereum and potentially disrupt its upward trajectory.
Celsius Network’s recent actions have introduced a level of instability into the Ethereum market. The offloading of $125 million worth of ETH to crypto exchanges indicates the company’s commitment to repaying its creditors under the umbrella of its bankruptcy proceedings. As Ethereum continues to showcase its resilience, investors continue to monitor the market closely, aware of the potential ripple effects caused by such large-scale sell-offs. Furthermore, the additional transfers made by other market participants underscore the broader uncertainties and dynamics of the cryptocurrency ecosystem. Amidst these complex developments, it is crucial for investors to exercise caution and conduct their own research before making any investment decisions.