Celsius Network Burn CEL Tokens, The Price Immediately Skyrocketed!

Bittime - Token burning is a practice often used in the crypto ecosystem to reduce the number of tokens in circulation and potentially increase the value of the remaining tokens.

The CEL token, as part of the Celsius Network ecosystem, recently conducted token burning. This token burn is done by sending a certain amount of tokens to an inaccessible wallet address, effectively reducing the number of tokens in circulation.

Purpose of Token Burning

This process aims to create scarcity, which in turn can trigger an increase in demand and a potential increase in prices. Thus, burning CEL tokens not only reduces supply but can also be considered as a proactive measure to strengthen the token's position in the volatile crypto market.

As part of the Universal Market Access protocol, UMA Coin allows users to design and create self-executing financial contracts on the Ethereum blockchain. With a market capitalization of around Rp 5 trillion and a circulating supply of 68.6 million UMA Coin from a maximum supply of 101.1 million, UMA Coin has shown strong performance.

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UMA Token Burning Boosts CEL Price

The practice of token burning by CEL might contribute to this increase in value by reducing the number of tokens in circulation, thus creating scarcity and price increases.

The price of CEL tokens soared significantly after Celsius Network, a leading decentralized finance platform, carried out a massive token burn on April 30. On-chain data reveals that Celsius burned more than 94% of the total CEL token supply, lowering it from the original 695.65 million CEL to just 40.55 million CEL. The transaction was the third-largest token burn in Celsius' history, with the tokens sent to null or inaccessible addresses.

After this massive token burn, the value of CEL soared by 360% in a week. The token also recorded a 67% gain in the last 24 hours and is currently trading at $0.94 (Rp. 15,076), its highest level since November 2022. Celsius' total market capitalization is now valued at $38.2 million (Rp. 612 billion), with daily trading volume reaching $78 million (Rp. 1.25 trillion).

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CEL Price Increase According to Santiment

Citing data from Santiment, a leading crypto analysis platform, CEL's Relative Strength Index (RSI) has risen from 82 to 89 in the last 24 hours. This indicates that CEL is currently overvalued and overheated at current prices.

"This sharp increase in RSI is a potential indication of high price volatility in the future," Santiment analysts said in a written statement.

In addition, Celsius' total open interest increased by 69% in the last 24 hours, from $7.91 million (Rp. 126.8 billion) to $13.39 million (Rp. 214.5 billion). This sudden increase in open interest could potentially lead to higher price volatility due to the increased likelihood of liquidation.

CEL Market Conditions

Meskipun demikian, tingkat pendanaan total untuk Celsius saat ini sekitar negatif 0,004%. Hal ini menunjukkan bahwa trader yang bertaruh melawan kenaikan harga untuk CEL sedikit lebih banyak daripada mereka yang memegang posisi long.

"Dengan RSI yang tinggi dan minat terbuka yang meningkat, CEL saat ini berada dalam zona volatilitas tinggi," imbuh analis Santiment, "yang berpotensi menyebabkan penurunan harga yang signifikan jika sentimen berubah arah."

Mengutip laporan dari Crypto Slate, pembakaran token masif oleh Celsius merupakan upaya untuk meningkatkan utilitas dan daya tarik token CEL di mata investor. Dengan menurunkan pasokan secara drastis, token ini diharapkan menjadi lebih langka dan berharga.

Kesimpulan

Pembakaran token CEL tidak hanya mengurangi suplai tetapi juga dapat dianggap sebagai langkah proaktif untuk memperkuat posisi token dalam pasar kripto yang fluktuatif.

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DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.