Michael Abetz
From the June 13th low of $0.13 hit amid Celsius bank run fears, CEL token is now up over 500%, trading at a price of $0.70 – $0.75.
That’s not counting a split second wick to $1.81 on Bybit and $2.57 on FTX exchange.
Despite retracing most of that wick, which may have been a short squeeze – FTX also has a perpetual futures pair which traders can use to short CEL – the Celsius token price is still up 150 – 200% in the past 24 hours (and highly volatile).
Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.
CEL Coin – What Happened
CEL price chart – Bybit
Firstly the CEL price lost 36% of its value on June 10th, and crashed further up until the 13th – in total losing 80% of its value in a few days, dropping from $0.64 to $0.13.
The panic selloff began with news of Alameda Research withdrawing large amounts of Ethereum from Celsius, a crypto lending platform, and stETH (staked ETH) losing its peg to Ethereum on staking platform Lido.
As CEL is the native token of Celsius, fears of the company being insolvent and Celsius going bankrupt led some investors to dump their CEL holdings.
Why the CEL price is up so much today – especially as Celsius have not posted many updates to Twitter to address investors’ concerns – is not 100% clear. The short squeeze may have led to some new buyer interest.
The last Celsius Twitter updates
The Celsius price has also already corrected back to 2020 support levels, being severely oversold and down almost 99% from its all-time high at Monday’s low (now 91% down).
Large amounts of CEL were sold off by holders seeing news outlets like Bloomberg and FT compare the Celsius news to the Terra LUNA, UST and Anchor Protocol black swan event, or to a ponzi scheme.
The Celsius market capitalization was just over $30 million at the lows (now $165million) and currently CEL token is ranked #137 on Coinmarketcap.
Celsius paused all withdrawals, transfers between accounts and crypto swaps on June 13th so another possibility is that some CEL tokens are now locked up on the Celsius platform and unable to be sold.
Celsius Liquidation Price
Some traders may also be confident that Celsius will come out of this situation without being liquidated – according to analysts, if the Bitcoin price drops to $14,000 the Celsius platform will go into liquidation – and be stepping in to buy CEL at this low price level.
CEL price history 2019 – 2022
Earlier this week the Celsius liquidation price was considerably higher – $18,500 – and Celsius putting up enough collateral to lower that liquidation threshold may have led to more investor interest in CEL, and less selling pressure.
Bitcoin is currently trading under the 200 week MA support however, at around $22,000. Cryptocurrency investors are watching the developing Celsius situation closely.
Celsius News Updates
One of the most up to date Twitter accounts to follow for Celsius updates is DeFi analyst @DeFiyst.
His last Celsius tweet was that the platform have paid off DAI debt and added more collateral – posting a screenshot of the Maker wBTC vault which now has a liquidation price of $14,002. Bitcoin would need to drop a further 37% to liquidate Celsius’ 23,962 Bitcoin position.
Update – Celsius have now lowered their liquidation price to $12,243.
Cryptoassets are a highly volatile unregulated investment product. Your capital is at risk.
Related
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This article was written for Business 2 Community by Michael Abetz.
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