The Celsius community has been desperately trying to rescue the Altcoin via various measures. One of their latest attempts of tossing a life jacket to the drowning alt has managed to garner some mainstream attention.
#CELShortSqueeze has been trending on Twitter over the past day. The informal community-driven initiative intends to pull up the token’s price. Towards the beginning of June last year, CEL was trading around its $8 peak. Post that, as the macro-bearishness started engulfing the market, CEL’s price started depreciating.
November’s rally hardly altered the token’s fate, and as a result, the Celsius stepped into the new year on a bearish note. With bulls not being able to make their presence felt, CEL’s valuation kept tumbling. In fact, its recent ecosystem-centric debacle managed to worsen things even further.
So, when compared to its $8 highs registered last year, CEL currently stands close to 99% down.
Now, with the aforementioned hashtag trending on social media platforms, community members have been mass-buying the token. Their plan is quite simple. Celsians intend to force short-sellers of CEL to cover their positions by intentionally driving up the price of the token. Balance on exchanges have evidently been decreasing, and the price has been reacting to the same.
Short-squeezing essentially happens when a shorted asset ends up rising in value. The said phenomenon forces short sellers to buy back the assets that they’d betted against to cap their losses. Consequentially, buying back the same asset when the price is rising instigates further upward price movements, and eventually squeeze out short-sellers.
How good is the artificially induced pump?
The said movement was initiated by the Celsians a couple of days back. However, it started gaining steam only over the past day. Resultantly, the token’s valuation soared up by more than 162% in less than 48 hours.
At press time, however, the movement’s hype was seen fizzling, with the token already registering a handful of back-to-back red candles on its hourly. Notably, the same translated to a 25% decline.
Now, at this stage it is worth recalling that the same short squeeze strategy was employed by Reddit users back in January last year. Video game retailer GameStop Corp. was targeted back then, and in no time, its share prices ended up exploding by more than 1000%. The artificially induced pump wasn’t good to last and the stock share prices ended up collapsing right after.
At this stage, people from the community have been drawing parallells between the on-going Celsius episode and GameStop’s incident from last year. With CEL already declining on the shorter timeframe charts, there’s no guarantee that the communities’ driven action would end up being a success.
