The price of CEL explodes in 1 week
It’s hard to miss this news. For the past few weeks, several experts have been pointing the finger at the fact that Celsius could find itself in a position of insolvency towards its users. In question, poor management of its clients’ assets and overly risky strategies.
A few days after the start of the turmoil, Celsius announced the suspension of cryptocurrency withdrawals, transfers and swaps on its platform. Consequently, the CEL token had collapsed by more than 75% following the announcement, falling from $0.365 to less than $0.09.
However, for no apparent reason, the token experienced a meteoric and exceptional progression. Indeed, the CEL has reached a new local high around $1.59 as of June 21. In other words, a rebound over 1600% within a week and since the announcement.
Evolution of the price of the CEL token since the announcement of Celsius
As a reminder, Celsius was notably accused of mismanagement of its clients’ assets. Indeed, the platform would have used the funds of its users as collateral to borrow with leverage and generate even more returns. Except that these positions were threatened with liquidationuntil the intervention of Celsius and a re-collateralisation.
👉 To understand everything – Dossier: Celsius Network, why and how is the platform collapsing?
But what actually happened?
It seems that this sudden increase comes from from an initiative coordinated by the Celsius community. This would probably have started with a tweet posted by Plan C, a recognized market analyst on the social network. Indeed, Plan C explained that a certain group would reward up to 20 million dollars the one who would bring evidence of a coordinated attack.
Very quickly, the announcement led Twitter frenzy. Many accounts have placed the hashtag #CelShortSqueeze in their description or in their nickname, thus reflecting their intention to target investors who have bet on the fall in the price of the CEL.
The hashtag remained for several hours top of the trends in the United States on the social network Twitter. As a result, users accustomed to day trading saw an opportunity and rushed into the asset, dragging it upwards.
As a result, those who wanted to bet on falling CEL (by borrowing stablecoin for CEL and then selling it immediately) found themselves in the obligation to repurchase some to cover itself. Thus, they themselves made their contribution to push the price up.
It is for all these reasons that the “short squeeze” has proven fruitful for the community, resulting in a meteoric rise in the CEL. Of course, this event is reminiscent of what had happened for the GameStop company in January 2021.
👉 To deepen – GameStop case: actions on DeFi, the false good idea?