Business

+4,000% in 60 days – °C short sellers melt

The heat wave is measured in degrees Celsius – The cryptocurrency market lacks competition in terms of nonsensical stories. At least at first glance. In fact, how can a token issued by a bankrupt crypto-lending platform see such growth? The company is still out of the woods and users’ funds are still frozen. CEO trying Get rid of some chips.

The degree is no longer working, the price is fading

Unfortunately, Silesi’s story is not an isolated one. Created a loss of parity for the UST stablecoin with the dollar last May Many swirlsAnd the Several bankruptcies. Expose a lot of his ecosystem (with its users’ money) so it can offer returns of up to 20% per annum in stablecoins.

Percentage setbacks being generic, many market players wanted to take advantage of. The influx of bad news and the risk of bankruptcy has piqued the interest of (amateur and confirmer) traders. position “short”. So they positioned themselves as short sellersanticipating a decrease in the price of the CEL token.

As Raptor Crypto notes, the CEL chart is all about the head. Even more for those who have recently been exposed. Celsius has suspended its customer services, but its token is still listed on many crypto exchanges, such as FTX. NewsAnd the Liquidity phenomenaAnd the emotions And the speculation. This is the recipe that paid the token 4,000% in two months.

Media pressure and the company’s poor standing has prompted many speculators to bet on its token. So that the bankruptcy of Celsius is “without doubt” for the majority of them. Thus, the latter have positioned themselves to sell on a “future” derivative contract (allowing to bet on the rise/fall of an asset).

Times have changed but not human psychology

Contrary to position spotwhich is a position future Generates a filter limit. One price, if the asset exceeds it, closes the position and uses this liquidity to inject the price at the liquidation price.

In the case of CEL crypto, the majority of participants were placed in a low position for several weeks. What makes you mechanically fat” Liquidity envelope » Available above liquidation thresholds for short positions. This situation creates a favorable environment for squeezing “, a ” compression shorts “In this particular case.

If the price reaches the first thresholds of liquidation, then the price can start a series of liquidation operations (forced closing of the position) for sellers. Thus the seller finds himself a buyer and thus pushes the price vertically. according to aggressiveness on which the sellers have been placed (leverage), Price action can get quite wild. But it’s not irrational either. Simply fueled by the phenomena of liquidity, Managed by the most experienced traders.

If it ever needs to be taken back, trading is a profession made after years of study and risk taking. without making sure it is profitable. Cryptocurrency trading is considered more risky because of Highly volatile assets. This is why many Sunday traders end up coming to terms with the facts and becoming simple investors again. Less pressure, less risk of seeing your capital melt under Celsius pressure…

Take advantage of the low-cost cryptocurrency buying opportunities that the market offers us! Don’t necessarily jump on a code that has made 4000% in recent weeks… but don’t miss out on the opportunity of a lifetime either, Sign up without delay to the reference crypto exchange platform FTX. In addition, you can take advantage of the lifetime reduction on your trading fees.

Related articles

Leave a Reply

Your email address will not be published.

Back to top button