Celsius (CEL) price gains 600%+, but analysts cite exchange error and a massive short squeeze

On June 14, discussions of Celsius continued to populate media headlines and June 14’s information concerned the platform’s CEL token accruing huge good points after what seems to have been both an alternate glitch or a short-squeeze. CEL worth spiked from $0.18  to $1.55 in a single abrupt candle earlier than sinking again to $0.60 throughout the identical one-hour candle.

CEL/USDT 1-day chart. Supply: TradingView

Presently, analysts are on the fence in regards to the motive for the explosive worth breakout. Some cite Celsius repaying a portion of its money owed as a motive, whereas others pinpoint a doable error on the FTX alternate as the explanation for what seems to be a brief squeeze.

Are debt repayments boosting investor confidence?

Celsius has been scrambling to cowl plenty of its money owed and it’s doable that some traders view this as an indication that the platform will have the ability to survive the present mayhem. 

Twitter analyst Hsaka stated that on-chain information reveals that the $28 million in Dai (DAI) that was just lately deposited right into a pockets managed by Celsius and has since been despatched to a separate handle, which he identified as a debt reimbursement handle.

Celsius pockets transactions. Supply: Twitter

Analysts imagine that the Celsius’s technique is to decrease its liquidation worth within the MakerDAO vaults  the place it holds funds and in the end keep away from insolvency.

Person interface issues on FTX

Whereas the start of debt reimbursement might need helped encourage extra confidence in Celsius, a number of crypto merchants reported points when making an attempt to purchase and promote the token on FTX alternate.

A number of replies to the tweet above confirmed person difficulties when making an attempt to promote CEL on FTX, and Twitter person Karl Larsen said that they “may solely fill my shorts at 0.87–0.95.”

The likelihood that the difficulties with the person interface on FTX performed an element in CEL’s fast spike was additionally noted by analytics supplier TheKingFisher, who posted the next chart highlighting when the person interface went down in relation to when CEL worth pumped.

CEL/USD worth. Supply: Twitter

Based on TheKingfisher, when the UX went down, “most merchants [were] unable to hedge, shut [or] scale back their positions.”

The agency stated,

“Spot market went above $2 to interrupt index and set off liquidations on objective. That is a spot manipulation to liquidate merchants. Index being calculated on FTX itself. This isn’t outdoors of their boundary in opposition to fraud [to] hold the market organized.”

Associated: Nexo presents to purchase out Celsius’ loans amid withdrawal suspension

It is simply one other brief squeeze

Some analysts say the worth breakout was nothing greater than an old style brief squeeze, as famous by Saleem Lala.

It stays to be seen what occurs with the worth of CEL transferring ahead, and it appears the almost certainly offender was a cascading liquidation as a result of some of these occasions are comparatively frequent throughout robust market volatility. For instance, Chain (XCN) token underwent an identical occasion on June 14 as its worth dropped 95% as a consequence of cascading liquidations.

The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer entails danger, it’s best to conduct your personal analysis when making a choice.