Celsius’ Ethereum Sell-Off of $35 Million Raises Alarms, ETH Price Vulnerable to Falling Below $2,000

Celsius Networks, despite its financial troubles and impending bankruptcy filing, has made significant moves in the Ethereum space this week, capturing the attention of the cryptocurrency world.

The on-chain platform has recently recorded a deposit of 13,000 ETH ($30 million) on Coinbase and an additional 2,200 ETH ($5 million) on FalconX within the last 10 hours. These transactions indicate that Celsius is actively addressing its ongoing financial issues.

Arkham Intelligence reports that Celsius has conducted substantial Ethereum sales, totaling over $125 million between January 8 and January 12. The primary purpose of these sales is to generate funds for debt repayment, demonstrating Celsius’ commitment to meeting its financial obligations.

Simultaneously, Dune Analytics has identified a broader trend of redemptions, with over $1.6 billion worth of staked Ethereum being redeemed during the same period. This high level of redemption activity signifies a significant shift in the Ethereum market compared to last year’s Shanghai update.

Despite the financial constraints resulting from court proceedings, Celsius still holds a substantial Ethereum reserve. Two staking wallets associated with Celsius currently hold over 557,000 ETH, valued at approximately $1.3 billion. This reserve further complicates the situation for Celsius.

In an effort to pay off its creditors as part of its bankruptcy proceedings, Celsius is auctioning off its Ethereum holdings. However, these transactions have caused a 4% drop in Ethereum’s price. Analysts expressed concern when Ethereum fell below $2,350, particularly as it dipped below the important demand zone of $2,380 to $2,461. If this level is breached, analysts predict a further decline to $2,000 or below.

Nevertheless, Santiment’s historical data highlights the role of large investors, often referred to as “whales,” in triggering profit-taking activities that lead to price drops. However, despite the challenges, decreasing funding rates suggest underlying optimism in the market, indicating a possible cooldown in previously overheated perpetual markets. This situation could potentially pave the way for an Ethereum rebound once the selling pressure subsides.

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Ethereum