Wonder why CEL token prices have increased instead of crashing fully!!

Everyone expected CEL token to collapse with Celsius making headlines of turning insolvent

Well, when considering the fundamentals of CEL token, obviously the straight forward investor will say it's going to cash because Celsius, the lending platform (whose token is CEL) has been making headlines that the crypto lending company has become insolvent, not having liquidity and funds to pay back its depositors.

Since Celsius has frozen all its depositor accounts with the platform having suspended token withdrawals and transfers for its depositors, this has raised concerns about Celsius platform’s liquidity and possible situation of insolvency.

Therefore, for this reason, everyone straightforwardly will expect CEL token prices to collapse. So, many traders have shorted the CEL token in platforms like FTX exchange.

CEL Short sellers expected to profit but it’s not so straight forward these days

When traders short an asset, they bet on its price falling further, they do it by taking leverage. This means in this case traders borrow CEL tokens, sell it and then short it. As the CEL token prices fall, these short sellers will buy back the tokens, bagging profits from their winning bet and then close their borrow positions.

This ideally sounds like a smart way to make money but these days most shorted assets are targeted by retail investors to pump the price of the shorted asset initiating a phenomenon of short squeeze, due to which short sellers lose out and retail investors benefit.

Remember the GME stock price pump episode involving the /r/WallStreetBets group?

Source

Ofcourse, this will be familiar to those who enjoyed the Game Stop(GME) stock drama, where the price of GME stock shooted up despite lacking fundamentals as a group of retail investors from the /r/WallStreetBets reddit group initiated a short squeeze of GME, pumping up the price of GME stock which backrupted giant hedge fund companies of the Wall Street like Malvin Capital, who expected to make big gains shorting the GME stock.

This hilarious episode was celebrated by retail investors all over the world as they gave those Wall Street Giant guys a taste of their own medicine.

You can read about that infamous classic GME /r/WallStreetBets short squeeze story here -:

The GME stock price boom episode with the giants of Wall Street losing out in the trading game

Straight forward investors are surprised because CEL token prices have risen not fallen!!

Well, let’s check the price of CEL token…

Trading view

OMG, the price has actually risen from June 13th from 0.0950$ to 1.5$ on June 21st.

CEL token was over 2$ on May 4th, it fell to 0.8$ cents on 31st May and then from there fell to a recent all time low price of 0.09$ cents on June 13th and then it turns interesting as CEL token price has risen due to short squeeze phenomenon playing out. This is why there is such an elongated candle pick on June 14th, due to CEL’s spike in price due to short squeeze.

#CelShortSqueeze tag has been trending on twitter since June 14th and retail investors have probably been leading this short squeeze after getting encouragement from influencers of this #CelShortSqueeze trend like @VegasDood702.

@VegasDood702 has explained why CEL token is a dream token to short squeeze and benefit in this tweet with nice informative attachments.

Tweet

Yes, CEL token should have crashed further and obviously expecting this, traders shorted CEL tokens on FTX exchange. However, on the other hand CEL token’s current tokenomics make it a dream token to initiate a short squeeze and make money.

Here are the reasons as explained by @VegasDood702 who appears to be a major influencer for this #CelShortSqueeze.

Image attachment from tweet

• There is low liquidity for CEL tokens with 87% of the CEL tokens locked in Celsius from where it cannot be withdrawn now as withdrawals and transfers in the platform are suspended.
• CEL is heavily shorted in FTX exchange and most of the circulating CEL tokens are there, out of which many are borrowed by short sellers shorting on CEL.

Image attachment from tweet

So, the #CelShortSqueeze propagated a plan to make money pumping the price of CEL tokens by initiating a short squeeze.

Image attachment from tweet

The #CelShortSqueeze plan that was propagated on Twitter

Tweet

The plan was for investors to buy CEL tokens and transfer them from exchanges to non-custodial wallets like metamask.

Mass buying of CEL tokens would push the price of the heavily shorted asset, while transfers of the brought CEL tokens to one’s personal wallet would reduce the supply of CEL tokens in FTX exchange.

As the price of CEL tokens increase, short sellers will be forced to buy back CEL tokens (at a high price) to close their borrow positions that would trigger a short squeeze.

CEL token holders who are able to sell their CEL tokens, can sell the tokens to these desperate CEL short sellers at a very high price and benefit. I know for CEL holders who have their CEL locked in Celsius this will sound just awful!!

Well, this is why the price of CEL has risen of late since June 13th, it’s because of CEL short squeeze triggered by the retail frenzy playing out the #CelShortSqueeze plan!!

Conclusion!!

Well, I like to end by saying, this post was written merely for thrill and enjoyment. I like this crazy attitude of investors these days playing the short squeeze game and entertaining those who are following the crypto space like me even in these dry times.
Obviously, this is no investment advise because I am not a qualified financial adviser, I am only a little crypto enthusiast, little crypto fish still!!.

Good day.