CRV prices spiral downward after exploit, is a recovery in sight
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The sentiment was strongly bearish for Curve token in the lower timeframes.
- CRV has been in a higher timeframe downtrend since April, and the recent developments showed further losses were likely.
It was bad news all around for Curve Finance [CRV] after the Vyper bug was exploited on 30 July. The attackers focused on Curve Finance liquidity pools and an estimated $70 million of funds were drained.
Read Curve DAO’s [CRV] Price Prediction 2023-24
The possibility that the Curve Founder could get liquidated meant investor sentiment was extremely fearful in the CRV market. The price action of the past few days reflected this as well.
CRV exploiter hasn't sold any CRV tokens yet & likely cannot use a CEX for execution due to KYC limitations.
If dumped into the CRV/ETH pool, with a remaining $8.7 Mil in liquidity, the Curve founder would likely get liquidated. pic.twitter.com/0oXM2AKXS6
— ASXN (@asxn_r) July 30, 2023
CRV saw a strong bounce from $0.5 but that might not show a recoveryThe 4-hour chart showed the market structure shifted bearishly on 17 July after CRV fell below the $0.8 level. It was highlighted in orange on the chart above. Since then, the token continued to spiral downward. Two weeks later it was trading at $0.64, and took another tumble after sustained selling pressure on 31 July.
The RSI has been below the neutral 50 mark since 17 July to show bearish momentum was strong. Over the past two days, both the RSI and the Awesome Oscillator showed heavy downward momentum in the CRV market.
Despite the bounce from $0.5 to $0.6 in recent hours, the outlook remained bearish for CRV token. It has support at the $0.5 mark, which had previously been tested in November and December 2022. Further south, the $0.32 support from October and November 2020 could see a positive price reaction.
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The rising Open Interest showed speculators flooding into the marketIn the past 48 hours, the previously dormant Open Interest chart spiked swiftly higher. For a majority of this time Curve DAO token took losses on the chart. During the bounce from $0.5 in the past few hours, the OI continued to rise. Does this show a shift toward bullish sentiment for speculators?
The spot CVD saw a bounce on 31 July when buyers tried to defend the $0.61 level, but the metric took a nosedive when the buyers failed. This showed that sentiment was bearish, and buyers must be cautious.