Celsius Network Exerts Pressure on the Ethereum Network

Ethereum’s recent price surge has injected optimism into the trading community, but the actions of the now-defunct crypto lender, Celsius, seem to be throwing a wrench into Ethereum’s upward momentum.

Despite the positive sentiment, Spot On Chain’s data reveals that Celsius deposited an additional 67,500 ETH into Coinbase Prime in the last two days, totaling around $156.5 million. This move is part of Celsius’ ongoing restructuring strategy, involving a cumulative transfer of 847,626 ETH (equivalent to approximately $1.9 billion) to centralized exchanges since November 13, 2023.

The repercussions of Celsius’ continuous sell-offs are evident in Ethereum’s recent performance. Over the last 24 hours, ETH witnessed a 2.4% decline, showcasing a notable correlation between Celsius’ transactions and short-term fluctuations in Ethereum’s market value.

In the last 2 days, #Celsius further deposited 67,500 $ETH ($156.5M) to #Coinbase Prime.

Overall, Celsius has moved 847,626 $ETH (~$1.90B) to CEX since Nov 13, 2023. Some of these $ETH might have been absorbed by whales via an OTC deal.

Just now, Celsius announced that the… https://t.co/LmwHCJYJis pic.twitter.com/s94laTdbZp

— Spot On Chain (@spotonchain) February 1, 2024

The consistent liquidation of ETH holdings by Celsius raises concerns for Ethereum on multiple fronts. Firstly, the substantial sell-offs may contribute to increased selling pressure, causing short-term downward price movements. This influx of supply can disrupt the delicate balance between demand and supply, potentially resulting in heightened price volatility and fluctuations.

Related: Ethereum Completes Dencun Upgrade on Sepolia Testnet

Furthermore, the ongoing actions of Celsius might deter potential investors, prompting them to avoid holding ETH due to uncertainties associated with Celsius’ behavior. This waning interest in ETH is underscored by the diminishing network growth observed in Ethereum.

The decline in network growth implies a decrease in the frequency of ETH trading by new addresses, reflecting a possible reluctance or caution among investors.

Turning to the state of NFTs, while Ethereum’s overall network activity remained steady with consistent gas usage, the number of NFT trades experienced a notable downturn. This reduction in NFT transactions could signify a shift in user preferences or alterations in market dynamics within the Ethereum-based NFT space.