Celsius’ CEL coin rose 300% today before falling.
Recent action on Celsius’ MakerDAO vault may have caused the change.
Celsius suspended withdrawals.
Celsius’ CEL cryptocurrency surged and then crashed today in a short squeeze. Signs of solvency on a Celsius wallet may have prompted the action.
Celsius’ CEL coin surged before plummeting today amid insolvency worries.
Celsius halted customer withdrawals Monday, sending CEL and the crypto market tumbling. It hit $0.095 before returning to $0.33 today. On numerous exchanges, it topped $1.42. On Uniswap V3, CEL/wETH hit $1.65, while FTX hit $2.57. Minutes afterwards, the token crashed as rapidly as it jumped. It’s currently trading at $0.57.
The move appears to be a “short squeeze,” where a momentary surge compels short sellers to buy back their position at a higher price. When short squeezes happen, prices rise. CEL leaped then fell.
Celsius offers yields on Bitcoin and Ethereum. CEL incentives and discounts Celsius loans.
The firm has liquidity concerns as the market declines, so it stopped customer withdrawals, swaps, and transfers Monday, citing “severe market conditions.” The firm’s CEO has dismissed insolvency rumors for weeks.
Recent activity on a Celsius-linked MakerDAO vault may have caused today’s short squeeze. MakerDAO is an Ethereum-based DeFi technology that mints DAI with collateral. On-chain data confirms that the vault’s wallet deposited $28.1 million in DAI at 14:58:32 UTC.
Market players may have viewed the DAI deposit as proof of Celsius’s solvency, despite it hasn’t been confirmed. CEL has risen since Monday’s low. It’s still 92.9% below its high, and Celsius withdrawals are paused.
