Celsius (CEL) plunged another 30% on Friday, as concerns grow about the long-term viability of the high rates given by the lending platform and similar blockchains in the wake of the Terra ecosystem’s implosion.
According to its website, Celsius’s CEL coin promises “actual financial rewards,” including up to 30% more weekly returns. According to coinmarketcap data, CEL was trading at roughly $0.47, down 28% in the last 24 hours. CEL sets up to mark the eighth consecutive day of losses.
While the cause of the latest drop is unknown, demand for high-yielding lending protocols has dropped since Terra’s failure in May. Depositors of TerraUSD (UST) stablecoins were promised payouts as high as 20% on the dead blockchain, which was the main driver of Terra’s growth. Celsius acknowledged its Terra exposure but has previously stated that it was able to evade Terra’s crisis early on.
Cryptocurrencies slumped on June 10 as inflation in the United States reached its highest level since 1981. In May, US inflation hit a 40-year high, indicating that pricing pressures are becoming more entrenched in the economy. This will certainly lead the Federal Reserve to extend its aggressive series of interest-rate hikes.
According to Labor Department data released on Friday, the consumer price index jumped 8.6% from a year ago, indicating a broad-based increase. The closely watched inflation indicator increased by 1% from a month ago, beating all expectations. The most significant contributors were shelter, food, and gas.
Onchain analytics, Santiment speaks on the market drop,‘’ With crypto markets falling once again in tandem with the SP500 bleeding, funding rates on exchanges have turned into short-central. Both Bitcoin and altcoins have seen major shorts turn up at the highest rates in a month. If too much FUD appears, this can cause a bounce’’.
Bitcoin fell to retest support at $28,832 before recovering slightly to trade at $29,255 at press time. Ethereum also fell to $1655 to change to $1680 at press time.
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