Celsius Network is bankrupt, so why is CEL price up 4,000% in two months?

Crypto lending platform Celsius Community has an approximately $1.2 billion gap in its stability sheet, with most liabilities owed to its customers. As well as, the agency has filed for chapter safety, so its future seems to be 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.

Compared, high cash Bitcoin (BTC) and Ether (ETH) rallied 40% and 130% in the identical interval.

Takeover rumors behind CEL explosion?

Technically, the worth rally made CEL an excessively valued token in early August when its relative power index (RSI) crossed above the 70 thresholds.

Takeover rumors seem like behind CEL’s upside power. Notably, Ripple wants to purchase Celsius Community’s belongings, according to an nameless supply cited by Reuters on Aug. 10.

Reuters reported that Ripple is focused on Celsius belongings however there is not any affirmation but from both firms. Celsius has halted withdrawals from the platform since June and has filed for Chapter 11 chapter which is able to 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 stories hit the wire.

In July, rumors additionally surfaced about Goldman Sachs’ intention to acquire Celsius Network for $2 billion. CEL was altering arms 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 big 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 all of a sudden, forcing brief sellers to purchase again the asset at the next worth to shut their positions.

Bitcoin & Celsius Replace

BTC could 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, might CEL pump to $3 subsequent?

LIKES/RETWEETS APPRECIATED pic.twitter.com/5axZiwcl1Q

— WSB Crypto Mod (@traderrocko) August 12, 2022

It’s attainable to create a brief squeeze due to CEL’s reducing 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 alternate 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?

Quick squeezes are exhausting 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 $6.50-swing excessive to $0.39-swing low churns out interim assist and resistance ranges for CEL. Notably, the token now eyes a breakout above its 0.618 Fib line at round $4.21, with its upside goal at $5.25, up 45% from the worth on August 13.

Associated: Crypto markets bounced and sentiment improved, but retail has yet to FOMO

Conversely, a break beneath the assist stage on the 0.5 Fib line at round $3.48 dangers crashing CEL towards $2.75, down 25% from the present worth stage.

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