• Celsius with bad news after bad news
• CEL token increases in value significantly within a very short time
• Probably responsible for takeover speculation and short squeeze
The crypto market has still not quite recovered from the June slump. The background to the misery was the collapse of the algorithmic stablecoin Terra/LUNA, which had a wide impact. Because with the massive drop in value of cyber currencies, the crypto lending service Celsius also got into serious trouble. Such was the difficulty that Celsius was eventually forced to freeze all customer funds in mid-June to “better position Celsius to meet its redemption obligations over time,” according to the crypto company at the time. Just days before the announcement, the Celsius token (CEL) fell to an annual low of $0.1554 via CoinMarketCap as part of the crypto sell-off. The insolvency of the bank specializing in cryptocurrency loans followed in mid-July.
advertising
Trade Celsius and other cryptos with leverage (long and short)
Celsius and other cryptocurrencies have recently corrected significantly. Trade cryptos such as Bitcoin or Ethereum with leverage at Germany’s No. 1 CFD provider and participate in rising and falling prices.
Despite insolvency – price rally at CEL
Now you might think that, similar to Terra/LUNA, this would mean the end of your own token CEL. But far from it. Rather, the cryptocurrency has been able to start a brilliant race to catch up since the low in June. The token is now trading at well over two US dollars, so it has gained more than a thousand percent in value since the price debacle.
Is Ripple Labs planning to acquire Celsius Network?
Several reasons could be behind the surprising price recovery. Vague takeover speculation arose a few days ago that Ripple Labs might be interested in taking over the bankrupt crypto lender. The Reuters news agency quoted a Ripple spokesman as follows: “We are interested in learning more about Celsius and the associated assets and how this could be relevant to our business.” However, the person declined to confirm that the blockchain company is actually interested in Celsius as part of a specific acquisition. However, the spokesman admitted that Ripple Labs is “actively seeking merger and acquisition opportunities to strategically scale the company.”
Twitter community wants to bring about short squeeze
Another reason that serves as a price catalyst is a short squeeze agreed by various Twitter users under the hashtag #CELShortSqueeze. After the difficulties surrounding the crypto lending service became known, many speculators took the opportunity to stock up on CEL shorts. The Celsius community is now trying to push the short sellers out of the cyber currency with increased purchases of the cryptocurrency and to force them to unwind their shorts, which in turn drives the price of the token. The merger is strongly reminiscent of the events surrounding the US video game retailer GameStop in early 2021.
Investors should remain cautious
CEL supporters are helped by the fact that due to the Celsius Network payout freeze, there are currently only a few tokens in circulation, making the course even easier to manipulate. As crypto expert Samir Kerbage puts it to CoinDesk: “Since the circulating supply is very small, it is technically possible to induce a short squeeze, although the impact on the overlying market might be very limited and it might be difficult to to keep it up for a long time.” Nevertheless, the endeavor already seems to be bearing fruit. Data from Coinglass, available to CoinDesk, shows that several hundred thousand CEL short positions have already been closed. However, Kerbage advises caution for investors interested in participating in the short squeeze: “There are limited benefits for investors trying to effect the squeeze, other than showing activism or support for Celsius while it is a major disadvantage: the token can go to zero or Celsius could dump more tokens on the market.”
So it remains to be seen how far the CEL token can ultimately go up.
Editorial office finanzen.net
Image sources: Pasuwan / Shutterstock.com, 3Dsculptor / shutterstock.com