The recent hack on Curve Finance has caused a significant sell-off and raised concerns about a potential contagion event in the DeFi market. The price of Curve DAO (CRV) dropped by 20.91% following the hack, reaching a two-month low. The decline continued the next day, hitting a seven-month low amid fears of liquidation of hefty loans taken by Curve Finance founder Michael Egorov against CRV as collateral.
However, there have been positive developments that suggest CRV may rally in the short term. Egorov sold 39.25 million CRV tokens for stablecoins to notable decentralized finance investors, partially repaid his Tether loans, and reduced the liquidation risk. Additionally, derivatives positions indicate that traders are actively shorting CRV, potentially leading to a short squeeze.
The current price of CRV is near multiyear lows, but if buyers can build support at this level, the price may rally towards resistance levels at $0.78 and $1.23. However, there are risks involved, as the hackers still hold a significant amount of CRV tokens, and the liquidation risk is not completely eliminated.
Summary:
– Curve Finance hack led to a sharp sell-off and concerns about a contagion event.
– CRV price dropped to two-month and seven-month lows.
– Positive developments include Egorov selling CRV tokens, partial repayment of loans, and short squeeze potential.
– CRV price may rally if buyers build support at current levels.
– Risks include hackers holding CRV tokens and remaining liquidation risk.
