Celsius Network: Here’s why CEL skates on thin ice

• CEL’s value continued to drop following Celsius’ bankruptcy proceedings.
• CEL’s price took an unimpressive turn after the 29 June short squeeze put short sellers at a loss.

Despite the recent approval from the judge overseeing Celsius’ bankruptcy proceedings, its native token, CEL, experienced a continued decline in trading value. 

Read Celsius’ [CEL] Price Prediction 2023-2024

The approval allowed the troubled crypto lender to initiate the sale and conversion of its altcoins into popular cryptocurrencies, Bitcoin [BTC] and Ethereum [ETH], starting from 1 July.

At press time, CEL exchanged hands at $0.1543, logging a 4% price decline in the past 24 hours, per data from CoinMarketCap. The decrease in CEL’s value came after it experienced a momentary hike in value on 29 June. 

The rally was due to a high volume of bets against CEL, following a 45% drop in value in the preceding month. On-chain data from Santiment confirmed increased network activity for the alt on 29 June, as its active addresses and new addresses count jumped by 92% and 42%, respectively, on that day.

Source: Santiment

However, contrary to what short sellers expected, a short squeeze was initiated as CEL’s price recorded an intraday high of 45%. According to CoinMarketCap, the alt traded for as high as $0.20. At its press time value, the alt’s price has since dropped by 25%.

CEL’s fate as tokens sell-off commences

An assessment of CEL’s performance on a daily chart revealed a bearish divergence between the alt’s price and its Moving Average Convergence Divergence (MACD) indicator. 

The last week had been marked by a persistent fall in CEL’s value. However, its MACD line rested above the trend line. This suggested that the crypto’s short-term moving average remained higher than its long-term moving average.

This kind of movement generally indicates that the asset in question is in a bullish trend or about to commence one. 

With CEL’s price moving in the opposite direction, a bearish divergence was foisted upon the market. Thus, there was a loss of any upward momentum. 

Further, CEL’s Chaikin Money Flow (CMF) rested beneath the center line at press time, returning a negative value of -0.24. A negative CMF value is typically taken as an indication of dominant selling pressure in the market.  

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CEL’s price traded close to the lower band of its Bollinger Bands indicator at the time of writing. This typically highlights increased selling pressure, which may result in a further decline in asset price. However, it also suggested that CEL’s sellers might inch closer to exhaustion, and a potential price reversal was imminent. 

Source: CEL/USDT on TradingView

However, for this to happen, weighted sentiment amongst investors has to improve and flip to positive.