CRV bounces 7% due to short squeeze.
The value of Curve DAO token (CRV) has increased by 7% in the past 24 hours due to mass liquidations of short traders in the market.
Curve Funding Rates Turned Extremely Negative Following Price Decline
On-chain analytics firm Santiment has reported that a large number of shorts had accumulated on cryptocurrency exchange Binance recently. The funding rate, which tracks the periodic fee that Curve perpetual contract traders on a specific exchange are paying each other right now, had assumed negative values as the cryptocurrency’s price had continued to head downwards.
The decline in the asset’s price came in part because of the SEC charges against Binance and Coinbase, or the Fed interest rates decision, while the other factor was CRV-specific uncertainty.
The founder of Curve Finance has taken up a large loan against a wallet that currently holds around 30% of the entire circulating supply of the token, causing concerns about this position getting liquidated in the market. This has led to FUD (fear, uncertainty, and doubt) in the wider cryptocurrency sector.
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Historically, whenever the market has leaned too hard into any particular direction, the market has tended to actually show a sharp move in the opposite direction. This is due to an event called a squeeze, which takes place whenever a sudden swing in the price occurs and causes a mass amount of liquidations to go off at once.
In this case, a short squeeze has taken place in the market, as the shorts that had accumulated have all been washed away. The Curve price has jumped off this squeeze, registering a rise of about 7%.
CRV Price
At the moment, Curve DAO token is trading around $0.61, which is down 20% in the last week.
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