Ethereum (ETH) may experience a significant sell-off of $1 billion following a major transaction initiated by Celsius, a struggling crypto lender. According to reports from on-chain analyst Lookonchain, Celsius transferred 459,561 ETH, worth approximately $1.014 billion, to several exchanges.

Of the total, 297,454 ETH (equivalent to $656.5 million) was sent to Coinbase Prime, 146,507 ETH to Paxos Treasury, and smaller amounts of 7,800 ETH ($17.2 million) each to FalconX and Coinbase. Despite this transfer, Celsius still retains a reserve of 62,468 ETH, valued at roughly $139 million, as disclosed by Lookonchain.

This large-scale allocation carries significant weight in the Ethereum market, potentially exerting immense pressure on the price of Ethereum and affecting broader market sentiment. Simultaneous selling of the $1.014 billion worth of ETH could lead to a substantial drop in Ethereum’s value.

Celsius’ Previous Ethereum Transactions

Celsius’ recent Ethereum transactions are not standalone events. LookonChain has previously detected significant transfers associated with Celsius, including a deposit of 13,000 ETH ($30 million) on Coinbase and 2,200 ETH ($5 million) to FalconX.

These transactions indicate Celsius’ proactive approach in managing its financial challenges but also signal potential volatility for Ethereum’s market value.

Arkham Intelligence reports that between January 8 and January 12, Celsius liquidated over $125 million worth of Ethereum to meet obligations to creditors.

Dune Analytics also highlighted a pattern of significant Ethereum redemptions, exceeding $1.6 billion, the highest recorded since last year’s Shanghai update.

As part of its bankruptcy proceedings, Celsius continues to liquidate Ethereum holdings to repay debts.

Ethereum’s Market Reaction

Following Celsius’s Ethereum transactions, the asset has experienced a nearly 10% decline in value over the past week, dropping from a high above $2,600 to around $2,186. However, Ethereum has slightly recovered, rising by 2.2% in the past 24 hours, with a trading price of $2,258 at the time of writing.

In response to these market developments, renowned crypto analyst Michael van de Poppe has identified three key factors that could indicate a bullish phase for ETH.

Van de Poppe points out that Bitcoin’s market behavior often sets the tone for altcoins, and its indications of bottoming out usually precede rallies in altcoins, suggesting a potential upturn for Ethereum. He also highlights the increasing enthusiasm around spot Ethereum ETFs, which could catalyze Ethereum’s market value in the coming weeks.

Additionally, Ethereum’s upcoming network upgrades, aiming to reduce transaction costs significantly, are expected to enhance the network’s efficiency and scalability, potentially boosting its market appeal.

Featured image Unsplash, Chart from TradingView

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.