Celsius’ $35M Ethereum Sell-Off Sparks Concerns; Price at Risk of a Crash?

This week, Celsius Networks made some big moves in the Ethereum space that got people’s attention in the digital currency world, even though the company is having money problems and is in the process of filing for bankruptcy.

In the past 10 hours, Celsius Networks recorded significant deposits, including 13,000 ETH ($30 million) on Coinbase and an extra 2,200 ETH ($5 million) on FalconX. Paired with other substantial Ethereum movements, these transactions highlight Celsius’s proactive approach in addressing financial challenges.

The $35 Million Ethereum Sell-Off

Reports from Arkham Intelligence shed light on Celsius’s extensive Ethereum sales, totaling over $125 million from January 8 to January 12. This strategic move aligns with the platform’s commitment to liquidating assets to meet financial obligations and fulfill creditor demands.

Simultaneously, Dune Analytics identified a noteworthy trend of Ethereum redemptions, surpassing $1.6 billion during the same period. This surge in redemption activity, the highest since last year’s Shanghai update, indicates a substantial shift in Ethereum market dynamics.

Despite facing financial constraints from court proceedings, Celsius still maintains a significant Ethereum reserve. Two staking wallets belonging to Celsius currently hold over 557,000 ETH, valued at approximately $1.3 billion. This reserve complicates the matter further for Celcius. 

The Ethereum Market Reacts

In an effort to satisfy creditors during bankruptcy proceedings, Celsius is auctioning its Ethereum holdings, leading to a 4% dip in Ethereum’s value. Analysts express concern over breaching the $2,350 threshold, a crucial point within the demand zone of $2,380 to $2,461.

Analysts anticipate a potential descent to $2,000 or lower should this level be breached.

Also Read: JP Morgan Says Spot Ethereum ETFs Approval Is Next – With 50% Chances  

Whales at Play

Santiment’s historical data introduces the intriguing concept of “whales,” significant players capable of triggering profit-taking activities. While this often results in market dips, decreasing funding rates suggest underlying optimism. This subtle shift hints at a possible cooldown in perpetually overheated markets, offering hope for Ethereum’s resurgence once selling pressures subside.