Crypto winter is seemingly freezing over the entire Web3 landscape, but it hasn’t stopped anti-establishment traders from trying to stick it to the man.
Crypto lending platform Celsius, which has recently faced an onslought of criticism after halting withdrawals in an effort to stabilize its liquidity crisis. Subsequently, its token $CEL has come under attack by short sellers.
Short sellers reportedly borrowed 18 million $CEL tokens on FTX with 37 million buy orders at US$0.01. However, as the supply of $CEL is locked (87% of $CEL is locked on Celsius Network, which has frozen withdrawals), short sellers are facing difficulty getting ahold of the $CEL they need to execute and cover their positions.
#CelShortSqueeze has since become one of the highest trending hashtags on Twitter, with users even adopting the slogan into their display names. One whale account was seen to acquire 200,000 $CEL on 22 June.
On Tuesday, the token saw a surge of 50% as communities rallied to pump the short squeeze, echoing GameStop’s two-week 1,000% rally in its January 2021 squeeze.
The attack seems to be working too. Between 19 June 2022 and 21 June 2022, $CEL rose 180% from US$0.67 to US$1.59, whilst the rest of the market saw an average rise of 12%.
If the rally continues, shorts are set to lose gargantuam amounts of money, much like they did during the GameStop saga. At the time of writing, $CEL is worth slightly over US$1.00.
However, unlike GameStop, which still had recovery potential as a Covid play (the video game industry excelled during the pandemic), there still remains serious concerns about Celsius Network’s potential.