Curve DAO [CRV] has been posting remarkably bullish performances in recent days. Since Saturday, the 6th of June, the DeFi token has rallied by 35.11%.
Its trading volume has also been strong, especially in the previous two days. The strong volume and gains suggest the upward momentum could continue—but how much higher?
How much higher can CRV bulls extend the current rally?
In a report in May, AMBCrypto suggested a potential rally after the altcoin flipped the $0.23 area to support. The report also cautioned that a drop below $0.217 would mean bears have the upper hand.
In the three weeks since then, the bearish warning has come to pass. The bearish structure break on the 1-day timeframe was highlighted in white.
CRV set a new lower low at $0.17, keeping the downtrend going, but has rallied well over the past week. However, traders and investors must remember that the altcoin was operating within a higher timeframe downtrend.
Therefore, their bias can remain bearish in the long term. However, the short-term momentum can be bullish for a few more days.
Traders’ call to action – Sell the bounce
The RSI on the 4-hour timeframe was extremely overbought. The bulls were challenging the $0.245 local resistance zone and were about to win this battle.
If the price climbs above the $0.2461 level, there is a chance it would rally further to challenge the $0.2668 level that was the 78.6% Fibonacci retracement level.
The liquidation heatmap showed there were clusters of short liquidations overhead that could pull CRV higher. The immediate magnetic zone was bounded by $0.247-$0.263. Another ambitious price target was the $0.295 cluster.
The price action and the RSI point to the same thing—CRV’s relief rally is nearing its end. There is a chance of a short squeeze, according to the liquidation heatmap, but the higher timeframe bias remained bearish.
Final Summary
- CRV’s price action was bullish in the short term, but the trend was likely to change soon.
- The liquidation heatmap warned of a short squeeze all the way up to $0.295.