Celsius Network is bankrupt, so why is CEL worth up 4,000% in two months?
Crypto lending platform Celsius Network has an roughly $1.2 billion hole in its stability sheet, with maximum liabilities owed to its customers. In addition, the company has filed for chapter coverage, so its long run seems bleak.
Still, Celsius Network’s local application token CEL has soared in valuation through over 4,100% within the final two months, attaining round $3.93 on Aug. 13 in comparison to its mid-June backside of $0.093.
In comparability, best cash Bitcoin (BTC) and Ether (ETH) rallied 40% and 130% in the similar duration.
CEL/USD day-to-day worth chart. Source: TradingView
Takeover rumors in the back of CEL explosion?
Technically, the fee rally made CEL a very valued token in early August when its relative power index (RSI) crossed above the 70 threshold.
Takeover rumors seem to be in the back of CEL’s upside power. Notably, Ripple needs to buy Celsius Network’s property, consistent with an nameless supply cited through Reuters on Aug. 10.
Reuters reported that Ripple is desirous about Celsius property however there is not any affirmation but from both corporations. Celsius has halted withdrawals from the platform since June and has filed for Chapter 11 chapter which can allow them progressively payback what they owe.
— Tajo Crypto (@TajoCrypto) August 10, 2022
CEL’s worth greater than doubled after the piece of stories hit the cord.
In July, rumors additionally surfaced about Goldman Sachs’ goal to procure Celsius Network for $2 billion. CEL used to be converting arms for as little as $0.39 round that point.
CEL worth quick squeeze
An military of retail buyers additionally seems to be in the back of the CEL’s large upside push within the final two months.
Some buyers have arranged a brief squeeze to restrict CEL’s drawback potentialities. A brief squeeze is when an asset’s worth rises all at once, forcing quick dealers to shop for again the asset at the next worth to near their positions.
Bitcoin & Celsius Update
BTC may be very uneven so my center of attention is on altcoins & CEL. I’d like btc to carry 22k for bullish bias. Cel needs breakout once more, Iam having a look to shop for extra above 2.6 with #CELShortSqueeze military in the back of it, may just CEL pump to $3 subsequent?
LIKES/RETWEETS APPRECIATED percent.twitter.com/5axZiwcl1Q
— WSB Crypto Mod (@traderrocko) August 12, 2022
It is conceivable to create a brief squeeze on account of CEL’s reducing circulating provide, essentially because of the freeze on Celsius Network’s token transfers.
Interestingly, FTX had about 5.1 million CEL tokens on Aug. 13, roughly 90% of all of the overall stream throughout exchanges. Meanwhile, the quantity of open quick positions at the trade used to be round 2.66 million CEL as opposed to the per thirty days prime of two.96 million CEL on Aug. 11.
FTX recreation quick. Source: Legacy Synthesis
In different phrases, quick buyers have closed about 300,000 CEL positions in simply two days.
What’s subsequent for Celsius toke?
Short squeezes are onerous to maintain over an extended duration, historical past displays.
Such potentialities put CEL at dangers of going through excessive correction within the coming weeks or months. As mentioned, the token is already overbought, which additional provides as much as the disadvantage outlook.
CEL/USD three-day worth chart. Source: TradingView
Drawing a Fibonacci retracement graph from $6.5-swing prime to $0.39-swing low churns out intervening time reinforce and resistance ranges for CEL. Notably, the token now eyes a breakout above its 0.618 Fib line (~$4.21), with its upside goal at $5.25, up 45% from as of late’s worth.
Related: Crypto markets bounced and sentiment stepped forward, however retail has but to FOMO
Conversely, a smash under the reinforce stage on the 0.5 Fib line (~$3.48) dangers crashing CEL towards $2.75, down 25% from the present worth stage.
The perspectives and critiques expressed listed here are only the ones of the writer and don’t essentially mirror the perspectives of Cointelegraph.com. Every funding and buying and selling transfer comes to chance, you must habits your individual analysis when you decide.
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