Crypto lending platform Celsius Community has a niche of about $1.2 billion on its stability sheet, with most of its liabilities owed to its customers. As well as, the corporate has filed for chapter safety, so its future appears bleak.
Nonetheless, the valuation of Celsius Community's native utility token CEL is up over 4,100% over the previous two months, hitting round $3.93 on Aug. 13, in comparison with its mid-June low of $0.093.
Compared, prime cash Bitcoin (BTC) and Ether (ETH) are up 40% and 130% over the identical interval.
CEL/USD every day chart. Supply: TradingView
Takeover rumors behind CEL explosion?
Technically, the value rally turned CEL into an overvalued token in early August when its Relative Power Index (RSI) surpassed the 70 line.
Takeover rumors seem like behind CEL's upside energy. In response to an nameless supply, Ripple particularly desires to purchase Celsius Community property quoted by Reuters on August tenth.
Reuters reported that Ripple is fascinated by Celsius property, however there isn't a affirmation from both firm but. Celsius has halted withdrawals from the platform since June and has filed for Chapter 11 chapter, which can enable them to step by step repay their money owed.
— Tajo Crypto (@TajoCrypto) August 10, 2022
CEL's value greater than doubled after the information broke.
In July, rumors additionally surfaced concerning the intention to acquire Celsius Community for $2 billion. CEL was altering palms for simply $0.39 on the time.
CEL value quick squeeze
A military of outlets additionally seems to be behind the CEL's large bullish run over the previous two months.
Some merchants have organized a brief squeeze to cap CEL's draw back prospects. A brief squeeze happens when the value of an asset abruptly will increase, forcing quick sellers to purchase again the asset at the next value to shut their positions.
Bitcoin & Celsius replace
BTC could be very uneven, so my focus is on Altcoins & CEL. I need BTC to carry 22,000 for bullish bias. Cel desires to interrupt out once more, I wish to purchase extra about 2.6 #CELShortSqueeze Military behind, might CEL pump to $3 subsequent?
LIKES/RETWEETS ARE APPRECIATED pic.twitter.com/5axZiwcl1Q
– WSB crypto mod (@traderrocko) August 12, 2022
It's doable to create a brief squeeze as CEL reduces the circulating provide, primarily because of the Celsius Community token switch freeze.
Curiously FTX had about 5.1 million CEL tokens on August 13, round 90% of the full circulation on the inventory exchanges. In the meantime, the quantity of open quick positions on the trade stood at round CEL2.66 million versus the month-to-month excessive of CEL2.96 million on Aug. 11.
FTX sports activities trousers. Supply: Legacy Synthesis
In different phrases, quick merchants closed about 300,000 CEL positions in simply two days.
What's Subsequent for Celsius Toke?
Brief squeezes are exhausting to carry over a protracted time period, historical past shows.
Such prospects put CEL susceptible to an excessive correction within the coming weeks or months. As stated, the token is already overbought, which additional reinforces the draw back prospects.
CEL/USD three-day value chart. Supply: TradingView
Drawing a Fibonacci retracement chart from a $6.5 swing excessive to a $0.39 swing low gives preliminary assist and resistance ranges for CEL. Notably, the token is now concentrating on a breakout above its 0.618 (~$4.21) Fib line, with its upside goal at $5.25, a forty five% rise from at present's value.
Associated: Crypto markets rallied and sentiment improved, however retail has but to FOMO
Conversely, a break beneath the assist stage on the 0.5 Fib line (~$3.48) dangers the CEL crashing in the direction of $2.75, down 25% from present value ranges.
The views and opinions expressed herein are solely these of the creator and don't essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer entails threat, you must do your individual analysis when making a call.
