Bitcoin

Celsius Network Is Bankrupt,so Why Is CEL Worth Up 4,000% In Two Months?

Crypto lending platform Celsius Network has an roughly $1.2 billion hole in its firmness 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 Network’s native utility token CEL has soared in rating by over 4,100% inside the final two months, reaching round $3.93 on Aug. 13 in comparison with its mid-June backside of $0.093.

Celsius Network Is Bankrupt,so Why Is CEL Worth Up 4,000% In Two Months?

As compared, prime cash Bitcoin (BTC) and Ether (ETH) rallied 40% and 130% in the identical interval.

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Takeover rumors behind CEL explosion?

Technically, the value rally made CEL an overly valued token in early August when its relative energy index (RSI) crossed above the 70 threshold.

Takeover rumors seem like behind CEL’s top side energy. Notably, Ripple inevitably to buy Celsius Network’s property, in line with an unidentified supply cited by Reuters on Aug. 10.

CEL’s worth greater than twofold after the piece of reports hit the wire.

In July, rumors extraly surfaced about Goldman Sachs’ purpose to amass Celsius Network for $2 billion. CEL was fixing arms for as little as $0.39 round that point.

CEL worth quick squeeze

A military of retail merchants extraly seems to be behind the CEL’s big top side push inside the final two months.

Some merchants have organized a brief squeeze to restrict CEL’s draw back prospects. A brief squeeze is when an plus’s worth rises abruptly, forcing quick Peter Sellers to purchase once more the plus at the next worth to shut their positions.

It’s manageable to create a brief squeeze ascribable CEL’s decreasing current 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 overall circulation throughout exchanges. In the meantime, the amount of open quick positions on the trade was round 2.66 million CEL versus the month-to-month excessive of two.96 million CEL on Aug. 11.

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In different phrases, quick merchants have closed about 300,000 CEL positions in simply two days.

What’s future for Celsius toke?

Brief squeezes are exhausting to maintain over a long interval, historical past exhibits.

Such prospects put CEL at dangers of going through excessive correction inside the coming weeks or months. As mentioned, the token is already overbought, which extra provides as a great deal like the draw back outlook. 

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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 top side goal at $5.25, up 45% from in the present day’s worth.

Conversely, a break below the help stage on the 0.5 Fib line (~$3.48) dangers blooming CEL towards $2.75, down 25% from the present worth stage.

The views and opinions expressed listed here are entirely these of the author and don’t au fond replicate the views of Cointelegraph.com. Each funding and buying and merchandising transfer includes threat, it is best to conduct your individual analysis when making a choice.