Celsius price rises 300% after organized ‘short squeeze’

Last month the crypto lending service went Celsius (CEL) below. The company had too much exposure to crypto projects and companies that had previously run into trouble and thus it was unable to keep its head above water. You would therefore expect that the token of Celsius, CEL, would almost bleed to death, but nothing could be further from the truth. CEL has recently increased by more than 300%.

CELL token

Yesterday and today, CEL’s price suddenly jumped above $2. That is a higher rate than before the company got into serious financial trouble! When it was announced that Celsius would stop withdrawals to users, CEL’s price plummeted to just $0.15. So miraculously, it has since seen a serious revival.

Since the bankruptcy of Celsius, the price of CEL has risen by at least 300%. The big question, of course, is why the token of a bankrupt company is rising so fast? According to analysts, this has everything to do with an organized short squeeze, as we saw earlier with stocks of GameStop and AMC.

Short Squeeze

When the problems at Celsius became known, a very large amount of traders started to buy the CEL token short. So they bet that the price of CEL will fall further. In that case, these traders would make a profit.

In a short squeeze, another group of traders tries this one shorts trap by inflating the price of the underlying assets. In this case, the shorts liquidated causing the price to skyrocket. It seems very likely that this is what is going on at CEL.

However, an analyst told at CoinDesk that maintaining such a short squeeze is extremely difficult:

“Since the circulating supply is very small, it is technically possible to create a short squeeze, although the effect on the overall market could be very limited and difficult to maintain over a longer period of time,”