CEL, the native token of embattled crypto lender Celsius Finance, is up 50% on the day as members of the project’s community attempted a short squeeze.
A short squeeze takes place when traders bet that the price of an asset will drop, but the price goes up instead, forcing them to close their positions.
Rallying around the #CELShortSqueeze hashtag on Twitter, Celsius holders planned to force a short squeeze by buying up CEL on the FTX crypto exchange, moving it to decentralized exchanges (DEXs), and setting sell limit orders (a sell limit order can only be executed at the limit price or higher).
The strategy is similar to that employed by day traders during the GameStop short squeeze of January 2021, pushing the price of GameStop’s (GME) stock up over 1,000% in two weeks.
So far, the Celsius short squeeze appears to be driving the price of CEL upwards; it’s currently trading at $1.39, up around 50% on the day and 320% on the week, per CoinMarketCap, though it’s pulled back from its 24-hour high of $1.56.
That’s still far below the token’s all-time high of over $8, recorded in June 2021, however.
Yesterday, the crypto lender issued a statement in which it said that its “objective continues to be stabilizing our liquidity and operations,” conceding that “this process will take time.”
The company said that it is maintaining “an open dialogue with regulators and officials” and is seeking to “find a resolution.”