Crypto lending platform Celsius Network has an roughly $1.2 billion hole in its steadiness sheet, with most liabilities owed to its customers. As well as, the agency has filed for chapter safety, so its future appears to be like bleak.
Nonetheless, Celsius Community’s native utility token CEL has soared in valuation by over 4,100% within the final two months, reaching round $3.93 on Aug. 13 in comparison with its mid-June backside of $0.093.
Takeover rumors behind CEL explosion?
Technically, the value rally made CEL an excessively valued token in early August when its relative power index (RSI) crossed above the 70 threshold.
Reuters reported that Ripple is concerned with Celsius property however there is no affirmation but from both firms. Celsius has halted withdrawals from the platform since June and has filed for Chapter 11 chapter which can allow them step by step payback what they owe.
— Tajo Crypto (@TajoCrypto) August 10, 2022
CEL’s worth greater than doubled after the piece of reports hit the wire.
In July, rumors additionally surfaced about Goldman Sachs’ intention to acquire Celsius Community for $2 billion. CEL was altering fingers for as little as $0.39 round that point.
CEL worth brief squeeze
A military of retail merchants additionally seems to be behind the CEL’s large upside push within the final two months.
Some merchants have organized a short squeeze to restrict CEL’s draw back prospects. A brief squeeze is when an asset’s worth rises immediately, forcing brief sellers to purchase again the asset at a better worth to shut their positions.
Bitcoin & Celsius Replace
BTC may be very uneven so my focus is on altcoins & CEL. I would like btc to carry 22k for bullish bias. Cel desires breakout once more, Iam trying to purchase extra above 2.6 with #CELShortSqueeze military behind it, may CEL pump to $3 subsequent?
LIKES/RETWEETS APPRECIATED pic.twitter.com/5axZiwcl1Q
— WSB Crypto Mod (@traderrocko) August 12, 2022
It’s potential to create a brief squeeze due to CEL’s decreasing circulating provide, primarily because of the freeze on Celsius Network’s token transfers.
Apparently, FTX had about 5.1 million CEL tokens on Aug. 13, roughly 90% of all the whole circulation throughout exchanges. In the meantime, the quantity of open brief positions on the trade was round 2.66 million CEL versus the month-to-month excessive of two.96 million CEL on Aug. 11.
In different phrases, brief merchants have closed about 300,000 CEL positions in simply two days.
What’s subsequent for Celsius toke?
Brief squeezes are laborious to maintain over a protracted interval, historical past shows.
Such prospects put CEL at dangers of going through excessive correction within the coming weeks or months. As stated, the token is already overbought, which additional provides as much as the draw back outlook.
Drawing a Fibonacci retracement graph from $6.5-swing excessive to $0.39-swing low churns out interim help 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 right now’s worth.
Conversely, a break under the help degree on the 0.5 Fib line (~$3.48) dangers crashing CEL towards $2.75, down 25% from the present worth degree.
The views and opinions expressed listed below are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, it is best to conduct your personal analysis when making a call.