Celsius Network's decision to return a portion of the locked funds to its customers has caused the cost of CEL to soar.
While some people are lauding Celsius Network for its decision to return a portion of the locked funds to their customers, others are less than impressed. The CEO Simon Dixon is one of those people. He points out that the amount offered is little compared to what the firm holds and falls short of what customers deserve.
In the latest development, according to information from Bloomberg, Celsius has requested the permission of the US Bankruptcy Judge to release about 50 million USD of cryptocurrency trapped on the platform under the custody account. According to court documents, a full hearing on the request is scheduled for October 6.
The move shows a certain "split" among the thousands of users who were severely affected by the fall of Celsius as custodial customers are likely to get paid first. According to Celsius, crypto depositors to earn signed interest transfer ownership of their funds to the company, while the department that only stores their assets on the platform technically retains ownership.
Even so, the roughly $50 million Celsius is looking to pay is currently only a fraction of the more than $4.3 billion digital assets stuck in custodial accounts on the platform. That's because many users transferred their holdings from interest-bearing accounts to custodial arrangements shortly before bankruptcy, which could have allowed Celsius to claim the funds.
CEL surged to $1.67 per token on the daily chart after hitting a low of $1.15 earlier this week. The token's sharp rally, accompanied by lower trading volumes, suggested that traders were not confident in further upside movements. This upward movement came after news of Celcius returning $50 million to users came to light.
Celsius saw an opportunity in the crypto market by deploying client funds towards more appealing investments like cryptocurrency lending. But the bear market caused the company's balance sheet to lose$2.85 billion, so they froze client accounts to prevent any more loss of money or investments. In July, the company Celsius filed for Chapter 11 bankruptcy.
The technical patterns indicate that CEL may be at risk of a price correction in September. Since late August, the Celsius token has been painting a "rising wedge" on the four-hour chart. This classic pattern typically leads to a bearish price movement.
The price tests the upper trendline's resistance for a pullback toward lower ground. That said, if the price breaks below $1.34, it will likely cause more selling and potentially lead us back down to important support levels.
The price of CEL could fall as low as $0.87 per share by September end, which would be a 40% decrease from today's value.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)