The heat wave is measured in Celsius: The cryptocurrency market lacks competition in terms of irrational stories. At least at first glance. In fact, how can the token issued by a bankrupt crypto lending platform experience such growth? The company is not out of the woods yet and user funds are still frozen. The CEO is trying to get rid of some chips.
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Celsius no longer works, the price flies away
Unfortunately, the Celsius story is not an isolated event. The loss of parity of the stablecoin UST with the dollar last May created many swirlsY several bankruptcies. Much of the ecosystem was exposed to it. (with the funds of its users) to be able to offer returns of up to 20% per year in stable coins.
As Celsius’s setbacks became public, many market players wanted to take advantage of it. The influx of bad news and the risks of insolvency have fueled the interest of traders (amateurs and confirmed) for a “short” position. Therefore, they positioned themselves as short sellersanticipating a drop in the price of the CEL token.
As Raptor Crypto points out, the CEL chart is mind-boggling. Even more so to those recently exposed. Celsius has suspended its services to clients, but its token is still listed on various crypto exchanges, such as FTX. News, liquidity phenomena, emotions Y speculation. Here is the recipe that powered the token 4,000% in 2 months.
Media pressure and the company’s poor posture led many speculators to bet against its token. So Celsius’s bankruptcy is “out of the question” for most of them. Therefore, the latter have been positioned for sale in a “future” derivative contract (allows betting on the rise/fall of an asset).
Times change but not human psychology
Unlike a position placea position future generates a liquidation threshold. A single price that, if it is exceeded by the asset, closes the position and uses this liquidity to inject it into the price, at the liquidation price.
In the case of CEL crypto, most participants had been positioned lower for several weeks. What mechanically makes you fat” the liquidity envelope » Available above settlement thresholds for short positions. This situation creates the favorable environment for a squeeze “, a ” tighten shorts “In this precise case.
If the price reaches the first liquidation thresholds, then the price can start chaining the liquidations (forced closing of a position) of sellers. The seller thus becomes a buyer and thus drives the price up vertically. depending on the aggressiveness with which sellers were positioned (leverage), price action can get totally wild. But not irrational either. Simply fueled by liquidity phenomena, operated by the most experienced traders.
If it were necessary to remember it again, trading is a profession, which is exercised after years of study and risk taking. Without being sure of being profitable. Cryptocurrency trading is even riskier because Assets are highly volatile.. This is why many Sunday traders end up accepting the facts and become simple investors again. Less stress, less risk of seeing your capital melt under the pressure of Celsius…
Take advantage of the opportunities to buy cryptos at low cost that the market offers us! Don’t necessarily jump on a token that has made 4,000% in the past few weeks… but don’t miss out on the opportunity of a lifetime either. register without delay on the reference crypto exchange platform FTX. In addition, you benefit from a lifetime reduction in your commercial fees (commercial link, see the conditions on the official website).
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