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.
The on-chain platform noted a deposit of 13,000 ETH ($30 million) on Coinbase and an extra 2,200 ETH ($5 million) on FalconX in the last 10 hours; the platform has made several important Ethereum transactions. These trades support the fact that Celsius is taking action to deal with its ongoing financial problems.
The $35 Million Ethereum Sell-Off: Proactive or Unethical?
Reports from Arkham Intelligence reveal that Celsius has undertaken substantial Ethereum sales, totaling over $125 million between January 8 and January 12. The primary objective of these transactions is to generate funds to pay off creditors, aligning with the platform’s commitment to fulfilling its financial obligations.
Simultaneously, Dune Analytics uncovered a broader trend of redemptions, with over $1.6 billion worth of staked Ethereum being redeemed during the same period. This redemption activity marks the highest level since last year’s Shanghai update, suggesting a notable shift in the Ethereum market.
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.
Ethereum Slips Below $2,350, Analysts Predict Further Decline
Additionally, Celsius is auctioning its Ethereum holdings to pay its creditors as part of its bankruptcy proceedings. However, these transactions caused Ethereum to fall 4%. Analysts were concerned when Ethereum fell below $2,350, especially since it was below its important demand zone of $2,380 to $2,461. Analysts expect a drop to $2,000 or lower if this level is broken.
However, Santiment’s historical data brings attention to the role of big bulls, often referred to as “whales,” in triggering profit-taking activities. This event makes people more likely to sell, which leads to price drops. However, amidst these challenges, decreasing funding rates suggest an underlying optimism in the market, hinting at a possible cooldown in previously overheated perpetual markets. This situation potentially allows Ethereum to rebound once the selling pressure subsides.