Crypto lending platform Celsius Network has an approximately $1.2 billion gap in its balance sheet, with most liabilities owed to its users. In addition, the firm has filed for bankruptcy protection, so its future looks bleak.
Still, Celsius Network’s native utility token CEL has soared in valuation by over 4,100% in the last two months, reaching around $3.93 on Aug. 13 compared to its mid-June bottom of $0.093.
In comparison, top coins Bitcoin (BTC) and Ether (ETH) rallied 40% and 130% in the same period.
Takeover rumors behind CEL explosion?
Technically, the price rally made CEL an excessively valued token in early August when its relative strength index (RSI) crossed above the 70 threshold.
Takeover rumors appear to be behind CEL’s upside strength. Notably, Ripple wants to purchase Celsius Network’s assets, according to an anonymous source cited by Reuters on Aug. 10.
Reuters reported that Ripple is interested in Celsius assets but there’s no confirmation yet from either companies. Celsius has halted withdrawals from the platform since June and has filed for Chapter 11 bankruptcy which will enable them gradually payback what they owe.
— Tajo Crypto (@TajoCrypto) August 10, 2022
CEL’s price more than doubled after the piece of news hit the wire.
In July, rumors also surfaced about Goldman Sachs’ intention to acquire Celsius Network for $2 billion. CEL was changing hands for as low as $0.39 around that time.
CEL price short squeeze
An army of retail traders also appears to be behind the CEL’s giant upside push in the last two months.
Some traders have organized a short squeeze to limit CEL’s downside prospects. A short squeeze is when an asset’s price rises suddenly, forcing short sellers to buy back the asset at a higher price to close their positions.
Bitcoin & Celsius Update
BTC is very choppy so my focus is on altcoins & CEL. I’d like btc to hold 22k for bullish bias. Cel wants breakout again, Iam looking to buy more above 2.6 with #CELShortSqueeze army behind it, could CEL pump to $3 next?
LIKES/RETWEETS APPRECIATED pic.twitter.com/5axZiwcl1Q
— WSB Crypto Mod (@traderrocko) August 12, 2022
It is possible to create a short squeeze because of CEL’s lowering circulating supply, primarily due to the freeze on Celsius Network’s token transfers.
Interestingly, FTX had about 5.1 million CEL tokens on Aug. 13, approximately 90% of all the total circulation across exchanges. Meanwhile, the amount of open short…
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