Will Ethereum bear the brunt of Celsius Network’s actions

• Celsius continued significant ETH deposits on Coinbase Prime.
• Ethereum’s gas usage was steady, but NFT trades experienced a decline.

Ethereum’s [ETH] price witnessed a rally over the last few days, inspiring optimism amongst traders. However, defunct crypto lender Celsius’ behavior might have caused some hindrance to Ethereum’s momentum.

Ethereum continues to suffer

Spot On Chain’s data showed that Celsius recently added another deposit of 67,500 ETH to Coinbase Prime, amounting to around $156.5 million over the past two days.

This comes as part of Celsius’ ongoing restructuring, with a cumulative transfer of 847,626 ETH (equivalent to approximately $1.9 billion) to CEXs since 13th November, 2023.

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

Looking at the data

Celsius’ recent sell-off exerted a negative influence on ETH’s price dynamics. Over the last 24 hours, the value of ETH experienced a decline of 2.4%, showcasing a correlation between Celsius’ transactions and the short-term movements in Ethereum’s market value.

Celsius’ consistent sell-offs can potentially have negative implications for Ethereum on several fronts.

Firstly, the repeated large-scale liquidation of ETH holdings by Celsius may contribute to increased selling pressure in the market, leading to short-term downward price movements. This heightened supply in the market can impact the delicate balance between demand and supply, potentially causing price volatility and fluctuations.

Moreover, many new investors may be put off by this behavior and might try to stay away from holding ETH to step away from the uncertainties brought on by Celsius’ behavior. The lack of interest in ETH was further showcased by the declining network growth of ETH.

A declining network growth suggested that the frequency with which ETH was being traded by new addresses had declined.

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State of NFTs

In terms of network activity on Ethereum, it was business as usual for the network as the gas usage on Ethereum had remained consistent. However, the number of NFT trades on Ethereum had declined.

Despite the routine operations of the Ethereum network, the reduction in NFT trades could indicate a shift in user preferences or market dynamics within the Ethereum-based NFT space.