Bankrupt cryptocurrency lending firm Celsius Network, as part of its ongoing restructuring process, has announced plans to retrieve Ethereum (ETH) tokens. Since filing for Chapter 11 in July 2022, Celsius has initiated a token recall and rebalancing process to ensure sufficient liquidity to meet its obligations during bankruptcy proceedings. The unlocking event is expected to occur in the coming days, with eligible creditors set to receive distributions of Bitcoin (BTC) and ETH in accordance with the approved restructuring plan.
Data from Nansen indicates that 32% of the pending ETH withdrawals are currently linked to Celsius, amounting to approximately 206,300 ETH valued at around $468.5 million. The market presence of such a large volume of tokens ready for release has led to speculation about potential downward pressure on ETH prices, although some believe that the completion of Celsius’s restructuring efforts could benefit the ETH market.
At the time of writing, ETH is trading at $2,250, having experienced a 5% decrease in value over the past week, according to CoinMarketCap. Technical indicators, such as the Relative Strength Index (RSI) at 48.82 and the Money Flow Index (MFI) at 54.74, suggest a downward trend in buying momentum since the beginning of the year.
The Chaikin Money Flow (CMF) indicator below the zero line confirms increasing liquidity withdrawal from ETH markets. Fears of the SEC’s general rejection of Bitcoin ETFs could be driving this capital removal. With a significant positive correlation between BTC and ETH, a potential rejection could lead to a price retreat for both cryptocurrencies. The negative direction index being above the positive direction index at the time of writing indicates that selling pressure may have exceeded crypto accumulation.
In conclusion, Celsius Network’s ETH token retrieval is a critical step in its restructuring, with significant implications for the ETH market. The current technical analysis suggests a cautious outlook for ETH’s price movement in the short term.