- CRV bounced from record lows with a 43% spike.
- However, traders are abandoning long positions in favor of short positions.
Curve DAO [CRV] was up 43% over the past week amid high trading volumes driven by surging buying activity.
In the last seven days, CRV price has steadily climbed from an all-time low of $0.18 to $0.28 at the time of writing. Despite the notable recovery, the token faces further headwinds as the bearish sentiment across the broader market weighs on the price.
Funding rates post a sharp drop
Data from Coinglass showed a sharp drop in funding rates to the negative zone, indicating that traders are abandoning long positions in favor of short positions.
The shifting trader sentiment suggests that CRV may have peaked, with the price poised for a correction or consolidation.
Source: Coinglass
The sharp drop in funding rates also signals that CRV is cooling off after being overheated. The long/short ratio being close to 1, further shows that the market is favoring neither longs nor shorts, leading to reduced volatility.
Source: Coinglass
However, there is still a need for caution because the open interest has increased from $67 million to $100 million per Coinglass. While this is often seen as bullish during an uptrend, the same might not be the case for CRV due to the negative funding rates.
The high open interest amid negative funding rates suggests an increase in short positions. This signals a growing bearish sentiment.
How high can CRV go?
CRV trading volumes have jumped by 175% in the last 24 hours, according to CoinMarketCap data.
Buyers are likely behind the high volumes as the Relative Strength Index (RSI) on the four-hour chart stands at 72, indicating that CRV is slightly overbought.
However, the RSI line is tipping north, suggesting that buyers are yet to leave the market, creating room for more gains.
The price has also created an ascending triangle showing a bullish continuation if CRV hits and bounces off the breakout price at $0.285. If bulls are strong enough, CRV could hit the next target at the 1.618 Fib Level ($0.36).
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According to analyst Credible Crypto on X, there is room for further gains for the token, with the price potentially increasing two-fold.
Source: Tradingview
Conversely, the bullish thesis could fail if weak hands that bought the recent bottom sell. This will trigger a drop to the 0.236 Fib level ($0.209).
