Crypto lending firm Celsius (CEL) is reaching out to users in hopes of touching base after the platform halted withdrawals last week. In a new blog post, Celsius claims they are focusing on stabilizing their abruptly-tumultuous operations. “It has been one week since we paused withdrawals, swap, and transfers. We want our community to know that […]
The post Crypto Firm Celsius Addresses Community As Top Investor Details Potential Recovery Plan appeared first on The Daily Hodl.
BnkToTheFuture co-founder Simon Dixon has proposed a recovery plan similar to the solution offered to Bitfinex after its Bitcoin hack in August 2016 – allowing customers to be compensated for their losses through tokens tied to the platform’s recovery.
Celsius’ lead investor BnkToTheFuture and its co-founder Simon Dixon have offered to assist the network by deploying similar “financial innovation” used in 2016 to save cryptocurrency exchange Bitfinex from liquidation.
I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later. I believe that this can only be solved with a solution using financial innovation https://t.co/FyF1Qaw6ZE
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) June 19, 2022
Although the statement from Dixon on Saturday, June 18, did not include specific details of the recovery plan offered to the Celsius’ board and CEO Alex Mashinsky, Dixon noted it would be similar to the one offered to Bitfinex after its hack in August 2016, which he claims was resolved within nine months.
“I believe traditional finance will not have a timely solution for Celsius as we saw in the past with Mt. Gox that still remains unresolved 10 years later. I believe that this can only be solved with a solution using financial innovation like we did with Bitfinex that was resolved within 9 months and worked out very well for depositors.”
Dixon noted that as a Celsius shareholder and lender, and due to the “short-term systemic impact on those that own Bitcoin,” he was “keen to support Celsius with a recovery plan,”
“It’s my position to offer solutions as we have the experience, licenses, and technology to do so,” he stated.
BnkToTheFuture is a global online investment platform that allows investors to invest in financial technology companies, funds, and other new alternative financial products. The platform touts a network of over 85,000 qualified investors. In June 2020, Celsius launched an equity offering with the investment platform, raising $20.46 million through 1039 investors.
Dixon’s plans for Celsius take inspiration from his firm’s solutions in August 2016, after Bitfinex announced it lost approximately 120,000 Bitcoin (BTC) in a cybersecurity breach, causing a loss of around $72 million of customers’ funds at the time.
Rather than pursuing liquidation proceedings, Bitfinex instead came up with an innovative recovery plan, which involved “promises to repay” in the form of BFX tokens to customers, representing the value of the money lost in the hack.
These tokens were tradable on the open market or could be held later for future repayment of $1 per token, and effectively allowed customers to speculate on the company’s recovery.
Later in the month, BnkToTheFuture added to the solution by working with Bitfinex to allow customers to convert their BFX tokens into equity in the company.
Around seven months later, BnkToTheFuture reported that the plan had been working, with victims recovering between 75% to 100% of their funds through the various measures available to them.
“In 2016, Bitfinex needed a plan to recover from their hack and the company I co-founded, BnkToTheFuture.com, supported them and executed a recovery that involved security tokens, debt, and equity and gave investors a very high return for the high risk they took.”
Dixon did not confirm whether his recovery plan would work the same way with a token, only that it would be solved using similar innovative methods.
However, there’s also an unofficial community-led recovery plan which appears to be gaining traction on Twitter under the hashtag #CELShortSqueeze.
The movement is attempting to force short-sellers of the Celsius token to cover their short positions by purposefully driving up the price of the CEL token through the mass purchase and withdrawals of the CEL token from various exchanges.
The Big #CELShortSqueeze Explained:
— Celsians (@CelsiansNetwork) June 19, 2022
1. Buy CEL on FTX.
2. Move tokens to MetaMask.
3. Connect to 1inch and set sell limit order at $100.
4. RT. pic.twitter.com/okG0tTvumZ
Short-selling is an investment strategy in which an investor borrows shares and immediately sells them, with the aim of buying them back later at a lower price and pocketing the difference. It allows an investor to profit from the decline of a share or asset.
Short-squeezing occurs when a shorted asset instead rises in value, which forces short sellers to buy back the shares they initially sold in order to keep their losses from mounting. However, buying back shares when the price is rising can cause further upward price movements, which can then further squeeze out short-sellers.
Related: Crypto Biz: Crypto carnage pushes Celsius, Three Arrows Capital closer to insolvency, June 9-16
The same strategy was initiated by users of the subreddit r/wallstreetbets in the January 2021, which saw stocks of the American video game retailer reach highs of almost $500 per share, around 25 times the valuation at the beginning of the month.
1/16 Let’s wait to hear an official statement from @CelsiusNetwork. But if that statement is positive, then this is GameStop, AMC and Wall Street Bets all over again (the sequel.)
— Otis ⓒ ⚡️ (@otisa502) June 15, 2022
These are my thoughts on the short sellers. I can only speak for that part of the attack on https://t.co/BbnmeBR1RT
Celsius dominated headlines earlier this month after the popular crypto lender paused withdrawals due to “extreme market conditions.”
The halting of withdrawals have locked customers out of their money, with many fearing that funds locked up on the platform may never again see the light of day, should the platform go belly up.
On June 20, Celsius released a statement to the Celsius community, noting that its objective continues to be stabilizing its liquidity and operations.
“It has been one week since we paused withdrawals, Swap, and transfers. We want our community to know that our objective continues to be stabilizing our liquidity and operations. This process will take time.”
The platform said it aims to maintain an open dialogue with regulators and officials and will continue to find a resolution. Meanwhile, the platform will be pausing its Twitter Spaces and Ask-Me-Anythings (AMAs).
Please find our latest note to the @CelsiusNetwork community here https://t.co/uIoaXbmeF2
— Celsius (@CelsiusNetwork) June 20, 2022
Celsius (CEL) is priced at $0.636 at the time of writing, down 92% from its all-time high.
The U.S. Securities and Exchange Commission (SEC) and several state regulators are reportedly investigating the decision by crypto lender Celsius Network to freeze withdrawals. U.S. Securities Regulators Investigate Celsius’ Withdrawal Freeze The U.S. SEC and securities regulators in Alabama, Kentucky, New Jersey, Texas, and Washington are investigating the decision by crypto lender Celsius Network to […]
Regulators in nearly half a dozen US states are looking into what caused popular crypto lending platform Celsius Network (CEL) to halt withdrawals last weekend. According to a new report from Reuters, securities regulators from the states of Alabama, Kentucky, New Jersey, Texas and Washington have begun probing into the matter. Celsius claimed its actions […]
The post State Regulators Across the US Are Probing Celsius Network (CEL) After Withdrawal Freeze This Week: Report appeared first on The Daily Hodl.
XRP's bearish outlook is driven by a mix of technical and fundamental factors that could see its price drop to $0.18 next.
Ripple (XRP) price stares at potential losses in the coming weeks as it breaks out of a "descending triangle" pattern, with its bias skewed toward the downside.
To recap, XRP started forming the technical structure after reaching $1.98 in April 2021, its second-highest level to date. In doing so, the token trended lower inside a range defined by a falling resistance trendline and a horizontal support trendline.
On May 16, 2022, XRP broke below the triangle's support trendline, accompanying a decent increase in trading volumes.
The move confirmed the descending triangle as a bearish reversal indicator. Meanwhile, as a rule of technical analysis, XRP now risks extending its downside move by as much as the triangle's maximum height when measured from the breakdown point, as shown below.
This could have XRP drop to $0.18 by July 2022, down nearly 40% from June 1's price.
XRP's bearish setup appears amid a broader selloff taking place across the crypto market, with some tokens now trading more than 90% below their record highs established last year.
The massive tailspin began in May after Terra (LUNA) — now known as Luna Classic (LUNC) — a $40-billion "algorithmic stablecoin" project, collapsed due to the failure of its staking system. This debacle found its match in Celsius Network, one of the largest crypto lending platforms, which unexpectedly paused crypto withdrawals in June over "extreme market conditions."
Related: Finblox withdrawal restrictions trigger concerns from the community
Since then, the crypto market has been facing one piece of bad news after another, from crypto fund giant Three Arrow Capital's potential insolvency owing to bad debts and risky trades to crypto lender Babel Finance halting withdrawals due to liquidity issues.
Babel Finance 也暂停了提现业务 pic.twitter.com/9Nk1gkEmVz
— 0xEdson | web3 (@0xEdsonCrypto) June 17, 2022
Macro risks also favor XRP's downside outlook with the Federal Reserve's 0.75% interest rate hike this June 15, ensuring lower liquidity for investors to speculate on risky assets.
Nonetheless, Kevin Cage, who runs Iron Key Capital, a crypto-focused hedge fund, says XRP will "survive" the bear market.
I know for a fact that no matter how hard it gets, $XRP will survive future bear markets.
— Kevin Cage (@Kevin_Cage_) June 14, 2022
XRPL is 10 years old. Tried & true.
Ripple expanding, new partners every week, hiring 300 more people
They want clarity and will fight until the end.
SEC chose the wrong company to fight
Meanwhile, Bleeding Crypto says that XRP could fall toward $0.17 but anticipates that the token would undergo a sharp rebound move after reaching the level.
"Looks like it may be going for a full reset of this past bull run," he wrote, hinting that XRP would reclaim $1.95–$1.98 during its next upside retracement.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
An embattled crypto lending platform is contemplating a financial restructuring plan in the wake of its native token dropping by 99% from its all-time high. In a new report, the Wall Street Journal reveals Celsius Network (CEL) has engaged the services of the Akin Gump Strauss Hauer & Feld law firm to explore its options […]
The post Celsius Undergoing Restructuring Process With Attorneys To Address Potential Insolvency: Report appeared first on The Daily Hodl.
DeFi contagion fears and bearish technicals mean additional downside pressure on Solana price.
Solana (SOL) tumbled on June 16 amid a broader retreat across the top cryptocurrencies, led by the Federal Reserve's 0.75% interest rate hike a day before.
Notably, SOL/USD plunged nearly 17% to $30 a token, wiping almost all the gains from the day before. The SOL price volatility liquidated almost $10 million worth of contracts in the past 24 hours across multiple crypto exchanges, data from Coinglass shows.
The latest declines come as an extension to SOL's broader correction, where it dropped by more than 90% after peaking out near $267 in November 2021. SOL also fell to its lowest level since July 2021 near $25.
In addition, a higher interest rate environment and the collapse of high-profile crypto projects like Terra have strengthened SOL's downside prospects.
Solana's pullback move on June 16 began after testing a horizontal trendline resistance near $34 that constitutes what appears to be an "ascending triangle" pattern.
Ascending triangles are continuation patterns, i.e., they tend to send the price in the direction of their previous trend. As a rule, breaking out of a triangle pattern in a bearish market, for example, sends the price down by as much as the structure's maximum height.
If SOL breaks below its ascending triangle's lower trendline then the bearish profit target will come below $22.50, as shown in the chart below.
Solana's downside target is about 25% below today's price and could be achieved by June. Nonetheless, if SOL bounces after testing the triangle's lower trendline as support, it would eye the $34-36 range as its interim upside target.
Over 27 million Solana tokens have exited its smart contract ecosystem since June 13.
The total value locked (TVL) inside Solana smart contracts dropped to 74.65 million SOL (~$2.25 billion) on June 16, down 27% in the last three days, according to data tracked by DeFi Llama. That amounts to nearly $840 million of withdrawals from the ninth-largest blockchain ecosystem by market cap.
Solend, a lending platform functioning atop the Solana ledger, witnessed a 26.5% decline in its TVL in the last three days and was holding 9.66 million SOL (~$290 million) as of June 16. Nevertheless, it remains the leading platform by TVL within the Solana ecosystem.
Related: Liquidity provider asks platforms to freeze 3AC funds to recover assets after litigation
The outflows indicate that depositors do not want to keep their SOL locked in DeFi protocols, a sentiment common across the sector after Terra, an "algorithmic stablecoin" project, collapsed last month.
Contagion, another yield ponzi going down.
— Pentoshi Powell Jr (@Pentosh1) June 16, 2022
Seriously get your coins off anything like Celsius and BlockFi before they aren't your coins anymore.
LFG, 3AC, Celcius etc all spread risk to each other and you pay the price for it https://t.co/cemFCvAeAz
Therefore, Solana's path of least resistance remains skewed to the downside in the near term, particularly with no improvement in terms of macro and fundamentals.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Ether price is forming a bear pennant pattern whose profit target comes to be near $850.
Ethereum's native token Ether (ETH) slumped on June 16, suggesting that its relief rally coinciding with the Federal Reserve announcing it will hike the benchmark rate by 0.75%, is at risk.
Ether's price slipped by 9.2% to around $1,120 per token a day after it rebounded by 23% after dropping to almost $1,000, its worst level since January 2021.
The ETH/USD pair's upside move, followed by a sharp correction, appeared in tandem with U.S. stocks, confirming that it traded like a risk-asset.
The decline means that Ether has shed 77% of its value since November 2021 and is now trading below its "realized price" of $1,740, data from Glassnode shows.
In addition, a higher interest rate environment adds more selling pressure, with investors leaving high-risk trades and seeking safety in traditional hedging assets, such as cash.
Investors' faith in cryptocurrencies has also eroded following the collapse of Terra, a $40 billion algorithmic stablecoin project, and lending platform Celsius Network's decision to halt withdrawals.
Atop that, Three Arrow Capital, a crypto hedge fund that oversaw nearly $10 billion in May 2022, reportedly faces insolvency risks. Fears about systemic risks have further limited the crypto market's recovery bias, hurting Ether.
ALERT: 3AC $250 Million $ETH Position Will Be Liquidated at ≈1000
— Market Meditations (@MrktMeditations) June 15, 2022
From a technical perspective, Ether's recent gains look like a bear market rally, which could be due to investors covering their short trades.
In detail, investors close their short positions by buying the underlying asset back on the market—typically at a price lesser than the one at the time of borrowing—and returning them to the lender. That prompts the asset to rally between large downside moves, but it does not signify a bullish reversal.
Related: Bitcoin is the ‘Amazon of crypto’ and everything else are bets, says Blocktower founder
These minor rallies could be a bull trap for investors that mistakenly see the rebound as a sign of bottoming out.
On the other hand, experienced bears utilize the pump to open new short positions at the local price top, knowing that nothing has fundamentally changed about the market.
Ether's "bear pennant" on shorter-timeframe charts also supports a bull trap scenario.
Bear pennants are bearish continuation patterns that form as the price consolidates inside a triangle-shaped structure after a strong downside move.
As a rule of technical analysis, traders measure a bear pennant's profit target by subtracting the breakdow point from the height of the previous decline (called "flagpole"), as shown below.
Thi puts the next bear target for ETH price at $850, down almost 25% from today's price.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Nexo says it currently has no exposure to Three Arrows Capital and has 100% liquidity to meet its debt obligations.
The price of Nexo (NEXO) continued to fall on June 15, as Nexo denied rumors of exposure to Three Arrows Capital (3AC), a Dubai-based crypto fund facing insolvency risks.
NEXO, which serves as a security token at a cryptocurrency lending platform of the same name, fell nearly 25% to $0.61 a unit, its lowest price reading since January 2021.
The massive intraday decline came as a part of a broader downside move this week, which stretched NEXO's losses to 40%.
An ongoing contagion in the crypto lending sector contributed to NEXO's underperformance.
Traders fear that most DeFi/CeFi firms, which offer high yields to clients on their cryptocurrency deposits, will default on their debts due to the wipeout of nearly $1.5 trillion from the crypto market in 2022.
The concerns continue to mount after the collapse of Terra, a $40 billion algorithmic stablecoin project, in May.
A month later, Celsius Network, which offers clients up to 18% yields, paused withdrawals due to “extreme market conditions.” Its clients have pulled almost half of their assets out of the platform since October 2021, thus leaving it about $12 billion as of May 17 to meet debt obligations.
I am definitely rooting for Celsius not to get liquidated. That is customer money. And fuck the funds who are hunting this stop loss. I hope they get rekt. #bitcoin
— Lark Davis (@TheCryptoLark) June 14, 2022
Meanwhile, 3AC, a crypto hedge fund, has witnessed liquidations of at least $400 million. In addition, on-chain data reveals that the firm may also have a minimum debt of $183 million against a collateral position of $235 million (derived in Staked Ether).
The address uses USDT/USDC to repay the debt and withdraws ETH, and then converts ETH to USDT/USDC through "sinofate.eth" and repays it, and so on. In almost 24 hours, the address has sold about 50kETH. https://t.co/TUzqXBXBwF
— Wu Blockchain (@WuBlockchain) June 15, 2022
The fund could transfer the economic risks to its lenders if it becomes insolvent.
"The lenders will bear the PnL [profit and loss] difference between how much they are owed versus what they get in liquidating their collateral," noted Degentrading, a market commentator known for highlighting the Celsius Network's liquidation issues.
He added:
"That means defaults will cause SIGNIFICANT EQUITY erosion [...] Not all lenders are made equal. Celsius is the worst. It has gone under. Nexo, I don't know. BlockFi is pretty bad as well."
However, Nexo says it currently has no exposure to 3AC despite partnering with the fund over a nonfungible token (NFT) lending product in December 2021. The firm asserts that the partnership with 3AC did not take off.
All Nexo has ever done with Three Arrows Capital is sign a partnership with their NFT fund, but it did not take off and we currently have $0 business and exposure with them.
— Nexo (@Nexo) June 15, 2022
Nexo has 100% liquidity to meet its $4.96 billion worth of debt obligations, according to U.S.-based audit firm Armanino. That raises the firm's potential to avoid a liquidity crisis in the event of a rising withdrawal rate, unlike Celsius.
Nonetheless, NEXO price treads ahead under persistent bearish risks, primarily due to the crypto market's dire state in a high interest rate environment. The NEXO/USD pair now eyes the $0.58-$0.69 range as its interim support due to its historical significance from December 2020-January 2021.
A rebound from the $0.58-0.69 range could have NEXO bulls eye $0.883 as their interim upside target. This level was instrumental as support during the early-May price crash; it now coincides with the 0.786 Fibonacci retracement graph drawn from the $0.11-swing low to the $3.71-swing high.
Related: Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in
Conversely, a decline below the $0.58-$0.69 range could have NEXO watch December 2020's support level near $0.43, down around 35% from today's price.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
ETH's latest plunge could bring more pain despite expectations that $1,200 should hold.
Ethereum's native token Ether (ETH) is showing signs of bottoming out as ETH price bounced off a key support zone. Notably, ETH price is now holding above the key support level of the 200-week simple moving average (SMA) near $1,196.
The 200-week SMA support seems purely psychological, partly due to its ability to serve as bottom levels in the previous Bitcoin bear markets.
Independent market analyst "Bluntz" argues that the curvy level would also serve as a strong price floor for Ether where accumulation is likely.
He notes:
"BTC has bottomed 4x at the 200wma dating back to 2014. [Probably] safe to assume it's a pretty strong level. Sure we can wick below it, but there [are] also six days left in the week."
Currently, ETH/USD is almost 75% below its record high, seven months after hitting around $4,950.
This massive correction has made the Ethereum token an "oversold" asset, per its below-30 relative strength (RSI) readings, another technical indicator showing that ETH is a "buy."
The last time Ether turned oversold was in November 2018, which preceded the end of a 12-month long bear cycle that saw ETH losing 94% of its value.
Unfortunately, the same bearish exhaustion cannot be promised in 2022 as Ether continues facing some serious macro headwinds.
Ether's attempt to find a concrete bottom appears against the backdrop of a selling frenzy happening across the crypto and traditional financial markets.
At the core of its 75% price correction is a hawkish Federal Reserve with its possibility of raising interest rates by 175 basis points by September's end, according to interest rate swaps linked to FOMC policy outcome dates.
In other words, riskier assets would suffer as lending costs rise. This could hurt Ether's recovery prospects despite it holding above a so-called "strong" support level.
1-2 months as the Ethereum merge would be implemented between August and October. And traders will front-run it. It won't matter much if the Fed gets more aggressive, but if it doesn't, then that's your catalyst.
— Alex Krüger (@krugermacro) June 2, 2022
ETH's price has been testing the 0.786 Fib line (near $1,057) as its interim support. This price level serves is a part of the Fibonacci retracement graph, drawn from the $1,323-swing high to the $82-swing low, as shown in the chart below.
A 2018-like 94% price decline would risk bringing ETH to the 0.236 Fib line near $375, down 70% from today's price.
Related: This key Ethereum price metric shows ETH traders aren’t as bearish as they appear
Conversely, if Ether indeed bottoms out near its 200-week SMA, its path of least resistance appears to be toward $2,000. An extended upside retracement above $2,000 would have the Ethereum token test $3,500 as its next bull target.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
