Celsius Network’s native token, CEL, suffered a sharp reversal after the lender filed for Chapter 11 bankruptcy protection, dealing a major blow to a social-media-driven short squeeze narrative that had gained traction in recent weeks. According to the report, CEL changed hands at $0.961 on July 13 shortly before the bankruptcy filing became headline news. After the filing was announced, the token fell to a same-day low of $0.40, marking a decline of roughly 58%. By July 14, CEL had recovered part of the loss, trading in a range of about $0.69 to $0.73, but the rebound did little to erase the shock created by the bankruptcy event.
A Community-Led Short Squeeze Campaign
The price action came after weeks of discussion across Twitter, Reddit, and Facebook about an effort to engineer a short squeeze in CEL. The idea was promoted by members of the Celsius community and other market participants who argued that aggressive buying pressure could force short sellers to cover, driving the token higher. Some supporters framed the campaign as a crypto parallel to the GameStop phenomenon associated with retail traders and the r/wallstreetbets community.
Backers of the strategy also suggested that a rising CEL price might somehow help Celsius work through its financial stress. One commonly cited talking point was that 93% of CEL tokens remained locked on Celsius, which supporters claimed could strengthen the conditions for a squeeze by limiting freely available supply. That argument became a core part of the campaign’s messaging as traders attempted to rally broader participation.
Bankruptcy Headlines Overpower Momentum
Even before the bankruptcy filing, CEL had been experiencing unusual volatility. Over the previous 30 days, the token had risen by more than 140% against the U.S. dollar, suggesting that speculative interest was already elevated. That backdrop made CEL one of the more closely watched distressed crypto assets in the market.
However, the Chapter 11 filing quickly changed the tone. The filing underscored the severity of Celsius Network’s financial troubles and reminded the market that token price appreciation alone cannot resolve a company’s broader restructuring challenges. As a result, the bankruptcy announcement overpowered the bullish momentum that had been fueled by online enthusiasm and squeeze-related commentary.
Although CEL bounced from $0.40 and at one point traded back above $0.80 on July 14, the token later settled into the lower $0.69 to $0.73 range cited in the report. That partial recovery indicated that speculative interest had not fully disappeared, but it also highlighted how fragile sentiment remained after the bankruptcy filing.
Relative Performance Still Weak
The report noted that while CEL had shown strong gains over the prior month, its short-term comparative performance remained under pressure. The token was down more than 19% against the U.S. dollar, while also falling 23% against bitcoin and 27% against ether. Those figures suggest that even with bursts of speculative demand, CEL continued to underperform major benchmark crypto assets during the period of heightened uncertainty.
In market-cap rankings, CEL was listed at about 116th among roughly 13,400 crypto assets referenced in the report. That marks a substantial retreat from earlier prominence. The token was also described as trading about 90% below its all-time high, underscoring how far it had fallen from its prior peak.
From Former Highs to Distress Pricing
CEL reached an all-time high of $8.05 on June 4, 2021, and at one stage had climbed to around the 36th position by market capitalization. Those numbers stand in sharp contrast to the token’s current valuation range and ranking. The comparison illustrates the scale of the repricing that has taken place as Celsius moved from growth-era optimism to crisis management and bankruptcy proceedings.
For many observers, the latest price swing serves as a reminder that distressed tokens can become magnets for speculative campaigns, especially when strong narratives emerge around supply constraints, community coordination, or short positioning. But the CEL episode also shows the limits of those narratives when hard corporate developments—such as a bankruptcy filing—force the market to confront underlying fundamentals.
Criticism of the Squeeze Thesis Intensifies
The push to squeeze CEL higher has not gone unchallenged. Critics cited in the report argued that promoting the token as a path to rescuing Celsius was misleading or overly simplistic. Some went further, saying that people encouraging the squeeze concept should be held accountable for amplifying a risky and potentially harmful narrative.
The central criticism is straightforward: even if coordinated buying can temporarily influence price, it does not resolve the legal, balance-sheet, and restructuring issues facing a bankrupt lender. In that sense, the disconnect between market speculation and corporate reality became much harder to ignore once the Chapter 11 filing was formalized.
Still, despite the backlash, promotion of the idea continued on social platforms at the time of publication. That persistence reflects a broader feature of crypto markets, where community narratives can remain influential even after major negative developments. In highly fragmented and sentiment-driven trading environments, distressed assets may continue to see sudden bursts of volatility long after their underlying outlook has deteriorated.
What the Move Signals for Traders
CEL’s collapse and partial rebound illustrate the high-risk nature of trading tokens tied to troubled crypto firms. Sharp gains can attract attention and create the appearance of momentum, but event-driven downside can be equally extreme. The move from $0.961 to $0.40 in a single day demonstrates how quickly sentiment can unwind when a major legal or financial development reaches the market.
For traders, the episode is less a story of a successful squeeze than a case study in how speculative narratives can collide with corporate distress. For the broader market, it reinforces a recurring lesson from crypto downturns: token price volatility may generate headlines, but it does not necessarily change the structural realities facing the issuing ecosystem.