in

Celsius token CEL rises 300% in a single week amid a GameStop-like ‘brief squeeze’ occasion


The value of CEL, the native token of Celsius Community, has virtually quadrupled since June 19 in what seems to be a frenzy stirred up by day merchants.

CEL value brief squeeze

CEL’s value rose from $0.67 on June 19 to $1.59 on June 21, a 180% spike in comparison with the crypto market’s 12.37% rise in the identical interval.

Notably, the rally began after PlanC, an impartial market analyst, announced a $20 million bounty for anybody who may show that the Celsius Community suffered a coordinated assault by the hands of a 3rd social gathering, which prompted the crypto lending agency to droop withdrawals final week.

CEL/USD each day value chart. Supply: TradingView

The announcement led to a frenzy on Twitter, with many accounts inserting the hashtag #CelShortSqueeze of their bio and thus reflecting their intentions to focus on traders who’ve betted CEL’s value would fall.

The hashtag was trending larger within the U.S. on Twitter. In the meantime, web queries for the key phrase, “CEL brief squeeze” additionally reached an ideal rating of 100 between June 12 and June 18, in keeping with information tracked by Google Traits. 

Web queries for ‘CEL Quick Squeeze.’ Supply: Google Traits

The “trending” hashtag and key phrase trace that day merchants purchased CEL tokens en masse, thus pushing its value upward.

Thus, traders who have been “brief,” i.e., those that borrowed and bought the token in anticipations of shopping for it again at a lower cost, needed to buy again at a better value as an alternative to “cowl” their bearish positions.

Consequently, the so-called “brief squeeze” proved profitable, leading to a large CEL rally.

The occasion served as a reminder of the favored GameStock inventory frenzy in January 2021, whereby a military of Redditors profited by damaging the brief positions of Melvin Capital and different hedge funds, inflicting billions of {dollars} of losses.

Insolvency dangers maintain

Celsius Community, which held over $20 billion value of digital property below administration final yr, now dangers turning into an bancrupt group. The reason being its lack of ability to pay excessively excessive yields to shoppers (as a lot as 18%) on their crypto deposits.

In Might, Celsius had solely $12 billion value of property, virtually half of what it held firstly of 2022, in keeping with its web site. The agency stopped disclosing its property below administration afterward.

CEL, a local foreign money contained in the Celsius ecosystem for incomes curiosity revenue and paying again money owed, stays below draw back strain because it trades virtually 84% beneath its peak degree of $8 in April 2021.

Associated: Cloudflare outage impacts a number of crypto exchanges

The CEL/USD pair now eyes a retest of $1.95 as its vary resistance degree, in keeping with the Fibonacci retracement graph proven beneath. 

CEL/USD weekly value chart. Supply: TradingView

Whereas a profitable break above the extent may have CEL check $3.11 as its subsequent upside goal, a pullback, alternatively, may drive the worth decrease towards $0.34, the present vary help, down 73% from in the present day’s value.

The views and opinions expressed listed below are solely these of the creator and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, it’s best to conduct your personal analysis when making a call.