Crypto Crash. Celsius Network Rekt.
We have a huge crypto crash this monday, essentially because of celsius network um were going to go through the news of that and what theyre doing, but we can see really ethereum, is suffering here down 16 in the last 24 hours, but down 30 in the last Week, uh all coins, obviously coming off as well as kind of mass liquidations occur right, so the lower things go and when you have one market participant which is kind of celsius, essentially selling off large parts of their assets. Obviously you get these liquidations, and so everything really falls down im going to try and explain what celsius have done here. Theyve actually come out and stopped withdrawals, so obviously um theyre in kind of a liquidity crisis. Now, as people are trying to get money off the platform and theyve said, obviously they have to stop withdrawals so lets look at the bitcoin price right now, funnily enough, if uh two market updates ago, i said uh when we got the uh inflation number, which was You know june 10th, last friday, um, you know if inflation was below expectations, we would see the price rise up if it was above expectations, wed see the price go down and i had this level as a kind of a support level. Now we obviously came in above expectations, which is really bad news for the economy and all markets as well stock market, everything else housing market, but bitcoin kind of stayed where it was, and so i was surprised at that.
Well now we have come down to that level. Essentially this isnt because of bitcoin its because of the blow up of celsius and their liquidity issues and theyve been essentially market selling um some assets, one of those is bitcoin, but obviously with ethereum coming down. Everything just follows, and so were hitting this support level right here. At 24, 25 000. support levels go out the window during a market liquidation event. So you have market participants who essentially um are a liquid or you know, just have a need to get out of a large amount of capital. And of course, if youve got a for seller in the market, youre not going to bid up very high. So its not really about price levels here its about when the deleveraging and the de risking actually finishes thats, when you would see prices actually try and stabilize. The downside here is that the economy is so so bad right now the real economy is so so bad and inflation is just still going up. You know eight point: six percent was the official figure, but you know honestly its more like fifteen twenty percent plus because of oil, and the only way that this actually stops is essentially a massive massive demand. Destruction, which is a recession, lost jobs, businesses going bust and so were seeing it crypto is going to be first in because its new, its unregulated, but its going to happen in the real economy as well, because thats, the only way we get oil down.
So this is happening. Lets get on to what celsius basically said right here. So celsius are a lending network lending and borrowing. So people can borrow us dollars against their bitcoin um and then people can put bitcoin ethan. You know a bunch of other assets on the platform and and celsius gives them um. You know, returns right. So what do they do with those assets? They lend them out on defy? They lend them out to um hedge funds and institutions that trade them and then pay an interest on them. Now what we dont know is you know what celsiuss balance sheet looks like and kind of how much they were paying out to their customers versus how much they were actually earning. So there were lots of rumors surrounding celsius and what was going on in terms of basically they didnt have enough liquidity to pay the people out that wanted to withdraw right. So this is at best a liquidity issue and at worst, just a balance sheet. Uh balance sheet issue for the business, so you can see what celsius has said here due to extreme market conditions. Today we are announcing that celsius is pausing all withdrawals swap and transfers between accounts, so stopping all transfers out and swaps and trades on their platform. Now this comes after because you can look at on chain right, so you see what celsius are doing in their d5 wallets theyve been putting a bunch of staked eth and other assets over to ftx exchange um.
Essentially, this is going to be over the counter stuff. So theyre a force, seller, alameda or ftx have taken this, this seller onto their books and theyre working the order for the seller, which essentially means theyre going to be trading theyre, going to take the risk on so alameda or ftx will act as a market maker. In this situation, take the risk on at a way way. You know price way below current prices and then just dump the market and trade it out so thats. What were seeing right now they say we are working with a singular focus to protect and preserve assets. To meet our obligations to our customers, this is obviously just jargon right here. Our ultimate objective is stabilizing liquidity and restoring withdrawal swap and transfers between accounts as quickly as possible. So whats. The issue here right well essentially, actually nexo, came out right here and said that theyre in a very strong position, financially and theyve basically offered to buy um celsiuss loan book. Okay, so buy out that part of the business. So obviously, celsius have um loans that they give out to people us dollar loans, thats backed by bitcoin, as nexo have said that theyre willing to kind of buy that part of the business, and i guess well see if celsius have to you know, go through with That what you can see here is they sent 320 million dollars worth of crypto into ftx. This is the slightly worrying bit because, if its a liquidity issue right like if you have lets, say a billion dollars worth of eth that youre lending out – and you know – people want and lets say you have 10 of that.
You know liquid in your wallet and the rest is lent out. If 20 of people want to withdraw, then you dont have the liquidity to pay them, because youre lending that out to institutions that might have it and dont want to give it back so thats. Just a liquidity issue: thats not a massive deal, but obviously what we see now is them. You know putting in hundreds of millions of crypto into ftx and basically selling that off and thats slightly more worrying because youre thinking, you know, why are they having to sell assets right and it possibly is because theyve over leveraged their book, so theyve got assets on That they were given as collateral for loans, and they may be over leveraging that so they may be putting that into defy borrowing against that and then theyve got themselves basically an over leveraged situation. The only thing you can do in that situation is stop withdrawals right because everyone was saying um. Essentially, we want to get our, you know, assets off and they just dont have the assets there to actually pay back. So you know id say best case scenario. Actually, its a liquidity issue worst case, they are going to have to take massive losses on their balance sheet, essentially um, and so that obviously, is worry, you know, can they actually take those losses on? Do they have to sell the business? Do they have to raise funds, or are they just market selling? Everything, and potentially you know just having to not.
You know, not meet the obligations that they have when people want to withdraw so theres a lot of questions here. I dont know the answers to this. I dont know celsiuss balance sheet, but theres a few scenarios that can happen here. You can see whats happening here um. Essentially, this is uh celsius position in rv, so theres a lending platform. You can see they basically um took a load of eth and wrapped bitcoin out and put it over to ftx, essentially to either um. You know, give liquidity for a leveraged position or basically to sell those assets. We dont know whats happening because obviously thats centralized, and so we cant see that, like this um account, says theyre either borrowing from ftx um, but you know putting collateral on and borrowing dollars against, ftx or theyre just selling out when it comes to potential prices for Bitcoin, underneath its not really about technicals right now, its really about where the leveraged seller ends. You know, when is that seller, eventually out of the position and taken taken, the loss um. So what you can see right here this position here is the is the lunar blow up. That was big enough and then weve seen the you know: whatevers happening with celsius right now, which is um, maybe around the same, so they both had billions and billions of dollars worth of assets on. So this is what has to happen essentially with bitcoin. You know when youre getting out of a position, its a market sale and it will stop being sold off when uh the position has finished, being sold off essentially, and we we dont know when that is uh.
Eth is obviously taking a big brunt of this, because most of the liquidity that was but stuck on celsius was was basically state teeth. So you know celsius were giving withdrawals for eath, but they were invested. Apparently, in a lot of steak, teeth and steak teeth is locked into the eat contract until its 2.0. So that may be the like. The crux of the matter for celsius is that they were allowing withdrawals of eath, but they had a lot of money in steak. Teeth which is locked, and so that may have been the liquidity issue um, as i said, i dont know whats going on at celsius, but that may have been it so this red line here was my. You know kind of bottom support level, weve broken through that again, so its just going to happen until whatever celsius need to get out of has happened and then you should see prices kind of stabilize again. If you want to go ahead and trade on buybit, which you see me using here, ill leave the link in the description and ill give you a deposit bonus up to four thousand dollars only in your futures trading account, though so um only for experienced traders. If you want to keep up to date with the latest with celsius, come and join the public discord, server ill. Pin that as a comment below ill, try and put all the latest info about when they are going to start withdrawals again or if they are going to start so ill leave.