Investing.com – The troubled crypto lending platform CEL cryptocurrency exploded higher last night after crashing earlier this week.
CEL/USD indeed peaked at $2.53 yesterday around 6 p.m. on the FTX platform, and although other platforms posted a lower price (the top was limited to $1.137 according to Coinmarketcap data by example), the performance is in any case phenomenal, while the cryptocurrency was moving towards $0.25 yesterday morning.
Based on the quotations displayed by FTX, the CEL therefore saw its value multiplied by 10 yesterday.
However, Celsius then quickly corrected, showing around $0.60 on most platforms, thus still with a rise of more than +100% over 24 hours.
Recall that Celsius shocked the market on Sunday by halting withdrawals, citing “extreme market conditions”, which led to a crash in the price of CEL, the network’s native cryptocurrency.
Regarding yesterday’s strong rebound, several analysts pointed out that the short selling of the Celsius token reached extreme levels before the rise, suggesting the possibility that yesterday’s rise was related to a “short squeeze”.
Another piece of news that may have supported CEL is that Celsius appears to have repaid $28 million of its outstanding loan on Maker, a decentralized finance protocol that lends DAI, a stablecoin, yesterday.
In the meantime, uncertainty over the future of Celsius Network continues, after an update last night claimed that the project teams are hard at work.
The question of the risks of contagion in the event of Celsius’ bankruptcy therefore still arises.
In this regard, it should be noted that Monsur Hussain, senior director of financial institutions at Fitch Ratings, quoted by CNBC, said that a liquidation of Celsius’ assets “would further shake the valuation of cryptoassets, leading to a broader contagion cycle within of the cryptocurrency sphere.”
Indeed, Celsius is very present in the so-called decentralized finance space, and holds many popular assets in the DeFi world, and a liquidation of the company would mean a liquidation of its assets, which would mechanically weigh on the cryptocurrencies concerned, with then possible cascading effects.
Hussain, however, wanted to be reassuring about the risks of contagion beyond the crypto market, judging that the current fall reflects a “shrinking of the whole crypto market”, adding that “the contagion with the system broader centralized financial will be limited.”
Attention is also turning to companies displaying activities similar to Celsius’s, such as rivals Nexo and BlockFi, which sought to downplay concerns over the health of their operations after Celsius announced its decision to halt withdrawals. .
Nexo said it had “strong liquidity and equity”, and had even offered to acquire part of Celsius’ loan portfolio – a proposal the company “refused”, it said. BlockFi, meanwhile, said all of its services “continue to operate as normal.”