What happened

After briefly dipping below the $0.90 level this past weekend, Celsius (CEL) has seen a rather remarkable recovery through early afternoon trading on Monday. As of 1:30 p.m. ET, this token has gained 6.5% over the past 24 hours. Now trading around $1.35 per token, Celsius has now rallied more than 55% from its weekend lows.

As many crypto enthusiasts may be aware, Celsius is a centralized lender in the crypto space that's filed for bankruptcy. Concerns over discrepancies tied to the company's reported gap between liabilities, or user deposits, and assets continue to plague this token.

Initially, Celsius reported this gap was around $1.2 billion. However, in a more recent Chapter 11 filing on Thursday, this amount was listed at more than $2.8 billion. Material weakness resulted as many investors jumped ship through Saturday.

That said, a number of periodic short squeeze rallies have resulted in a number of impressive near-term surges for Celsius. This has provided more speculative interest in CEL as a trading opportunity. Now, investors question whether this most recent rally can be sustained.

So what

While Celsius reportedly has around $167 million in cash on hand to fund operations through October, it's unclear as to how much of this cash will be redirected by the courts to pay back creditors, or how long the restructuring process will take. Some large institutional investors, such as Canada-based pension fund Caisse, have already written off large bets on Celsius. Thus, the smart money seems to think the party's over.

While the road ahead does appear bumpy for this bankrupt crypto lender, speculators are still out there looking to scalp any gains from near-term rallies. Thus, in the near term, Celsius appears to be a likely candidate for some serious volatility.

Now what

Investing in any crypto project is inherently risky. However, for embattled crypto lenders such as Celsius, this risk profile is amplified. As of right now, it appears most investors are steering far clear of this project, with upside demand limited to traders and speculators. 

Celsius has provided a great example to investors of the dangers of seeking above-market yields in the cryptocurrency space. When things appear too good to be true, they often are. And at some point, the yield-generating models that investors have gotten used to will cease to make sense. 

Personally, Celsius is a project I think investors would be best to avoid, given its dim outlook moving forward.