Celsius token CEL rises 300% in one week amid a GameStop-like ‘short squeeze’ event

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The price of Celsius Network’s native token CEL has nearly quadrupled since June 19, in what appears to be a frenzy fueled by day traders.

CEL Price Low Squeeze

The price of CEL rose from $0.67 on June 19 to $1.59 on June 21, an increase of 180% compared to the 12.37% growth of the crypto market in the same period.

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Notably, the rally began after PlanC, an independent market analyst, announced A $20 million bounty for anyone who can prove that the Celsius network suffered a coordinated attack at the hands of a third party prompted the crypto lending firm to suspend withdrawals last week.

CEL/USD daily price chart. Source: TradingView

The announcement caused a frenzy on Twitter, with several accounts placing the hashtag #CelShortSqueeze in their bios, thus indicating their intention to target investors who have bet on the price of CEL.

The hashtag was trending more on Twitter in America. Meanwhile, the Internet query for the keyword, “CEL SHORT SQUEEZE” also reached a perfect score of 100 between June 12 and June 18, according to data tracked by Google Trends.

Internet queries for ‘CEL Short Squeeze’. Source: Google Trends

The “trending” hashtag and keywords indicate that traders collectively bought the CEL token on that day, thus driving its price upwards.

Thus, investors who were “short”, that is, those who borrowed and sold it in anticipation of buying back at a lower price, had to buy back at a higher price rather than “cover” their bearish position.

As a result, the so-called “short squeeze” proved successful, resulting in a massive CEL rally.

The event is reminiscent of the popular GameStock stock frenzy in January 2021, in which an army of Redditors profited by damaging short positions of Melvin Capital and other hedge funds, causing billions of dollars in losses.

insolvency risk remains

Celsius Network, which had more than $20 billion in digital assets under management last year, is now at risk of becoming an insolvent organization. The reason for this is the inability to pay customers extremely high returns (up to 18%) on their crypto deposits.

In May, Celsius had only $12 billion in assets, which is almost half of what it was at the beginning of 2022, according to its website. The firm subsequently stopped disclosing its assets under management.

CEL, a native currency within the Celsius ecosystem for earning interest income and paying off loans, remains under negative pressure as it trades down nearly 84% from its April 2021 peak of $8.

RELATED: Celsius Warns Community About Fake Accounts, Blocks Twitter Blanks and AMAs

As per the Fibonacci retracement graph shown below, the CEL/USD pair is now eyeing a retest of $1.95 as its range resistance level.

CEL/USD weekly price chart. Source: TradingView

While a successful break above the level could see the CEL test $3.11, a pullback, on the other hand, could push the price lower to $0.34, the current range support, 73% below today’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.