On June 14, discussions of altcoin Celsius continued to fill media headlines. The news on June 14 included the platform’s CEL token making huge gains after what appeared to be a stock market glitch or short-term nuisance. CEL price rose from $0.18 to $1.55 in a spike. It then fell back to $0.60 within the same one-hour candle.
Altcoin Celsius sells Dai (DAI): Escape from bankruptcy?
Currently, analysts are worried about the cause of the explosive price breakout. Some cite Celsius’ repayment of some of its debts, while others cite a possible error in the FTX exchange as the reason for the short squeeze. As Cryptokoin.com has previously reported, Celsius is struggling to pay off some debts. It is possible that some investors may see this as a sign that the platform can survive the current turmoil.
Twitter analyst Hsaka stated that on chain data was recently deposited in $28 million Dai (DAI) into a Celsius-controlled wallet. He said he’s since shown it was sent to a separate address he identified as the debt repayment address. Analysts believe Celsius’s strategy is to lower the liquidation price on the MakerDAO vaults it holds and ultimately avoid bankruptcy.
UI issues in FTX
The initiation of debt repayment has helped give Celsius more confidence. However, several crypto traders reported having problems trying to buy and sell tokens on the FTX exchange. Several replies to the tweet confirmed user difficulties when trying to sell CELs on FTX. Twitter user Karl Larsen said they could “fill short positions at just 0.87-0.95.”
Likely to play a role in the rapid rise of CEL by UI challenges in FTX, by analytics provider TheKingFisher, who published the graph below highlighting when UI declines over time when CEL price rises. was also noted. According to TheKingfisher, when UX fell, “most traders were unable to hedge. He could not close [or] reduce his positions.” Therefore, it shows what happened in FTX as manipulations to liquidate users.
Just another short squeeze?
Some analysts say the price breakout is nothing more than an old-fashioned short-term squeeze, as Saleem Lala points out. We’ll see what happens with the price of CEL moving forward. The most likely culprit appears to be a gradual purge. This is because such events are relatively common during strong market volatility. For example, Chain (XCN) token suffered a similar event on June 14 as its price dropped 95 percent due to gradual liquidations.
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