Celsius has just announced it will unstake nearly half a billion ETH to repay its creditors
While this is some good news for Celsius' creditors, market commentators have expressed fears about the impact of a $470 million flood entering the market, especially now that the crypto market is in a delicate position.
In 2022, Celsius ran into some trouble when the crypto market crashed and billions of dollars got wiped off the market.
Customers started to withdraw massively from the platform, causing a collapse that eventually took the company down.
Celsius sought Chapter 11 bankruptcy protection in July 2022 in an attempt to reorganize its debt and carry on with business as usual.
As part of its bankruptcy recovery plan, Celsius proposed to distribute Bitcoin or Ether from its assets to its creditors, depending on their preference.
Coincidentally, Celsius claims to be one of the largest stakers on Ethereum 2.0, with over 200,000 ETH locked up
Nansen corroborates this narrative and shows that Celsius currently holds nearly a third of the total amount of staked ETH (about 206,300 ETH).
At the current Ether price, this amount of Ether sits somewhere around $468.55 million, with about 40,249 ETH already withdrawn by Celsius.
And on 5 January, Celsius confirmed that it has started rebalancing and unstaking its Ether holdings
Naturally, the news of the Ether being unstaked has caused some degree of panic in the crypto market.
While some have praised this move as a way to reduce the amount of ETH staked in the market and improve circulation, others have criticized Celsius heavily.
Overall, the impact of such a huge flood entering the Ether market is bound to have some lasting consequences
According to the charts, Ethereum broke below an important formation on its daily chart, right around the time of Celsius' announcement.
This poses a serious issue for the price of Ethereum because if the bulls are unable to start a price recovery and a possible break above this ascending trendline once again, Ethereum is likely to enter an even steeper decline.
The Fibonacci retracement tool on the daily chart shows that while the bulls saved Ethereum from falling below $2,120 on 4 January's decline, we might see an even stronger decline to $1,895 if the bulls successfully push Ethereum under $2,120 again.
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