Journalist
Posted:
- On August 30, Curve Finance launched three dynamic liquidity pools on Base.
- However, the TVL has continued to fall.
As part of its effort to raise new liquidity, Curve Finance has created a decentralized exchange (DEX) for stablecoins [CRV] launched new pools on the Layer-2 (L2) platform Base on August 30. However, the overall value of the protocol (TVL) has continued to decline since then.
We’re up @BuildOnBase pic.twitter.com/QNrqkUdScz
— Curve Finance (@CurveFinance) August 30, 2023
Is your wallet green? Then view the CRV Profit Calculator
TVL’s decline is likely due to continued capital flight from Curve since then re-entry hack on July 30. In that hack, an attacker exploited a vulnerability in Curve’s code to steal approximately $73.5 million worth of crypto assets.
The hack shook confidence in Curve as many users have since withdrawn their funds from the platform. Since the hack, Curve’s TVL is down 31%.
At the time of writing, there were $2.65 billion in assets locked in Curve, with Base contributing less than 1%. According to the three dynamic liquidity pools on Base, only $15 million in liquidity has been provided since their launch Defillama facts.
These pools include 3c (USDbC, axlUSDC, and crvUSD), cbeth (ETH, and cbETH), and tricrypto (crvUSD, tBTC, and ETH).
The decrease in CRV remains consistent, but there is a catch
At the time of writing, CRV switched hands for $0.4406. Influenced by the hack, the price of the alt has dropped 22% in the past month, according to data from CurrencyMarketCap revealed.
In the aftermath of the hack, many feared that Curve founder Michael Egorov’s collateral on Aave was at risk of being liquidated, jeopardizing their CRV investments. On-chain liquidity for CRV thinned out shortly after the hack, and the token’s price has plummeted since then as investors increasingly ‘dumped their bags’.
An on-chain assessment of demand for the alt over the past month revealed a significant decrease in the number of daily active addresses involved in CRV trades and the number of new addresses being created to trade the alt.
Source: Sentiment
On the daily chart, the main momentum indicators showed a downward trend. This confirmed the decrease in CRV accumulation since the July 30th exploit. For example, CRV’s Relative Strength Index (RSI) was at 27.43, and the Money Flow Index (MFI), also positioned below the midline, was at 48.61.
Similarly, the alt’s On-Balance-Volume (OBV) fell 14% over the past month. When an asset’s OBV falls in this way, it means that the sales volume is greater than the purchase volume.
Read Curve Finance’s [CRV] Price Forecast 2023-24
While the price of CRV fell, the Chaikin Money Flow (CMF) started an uptrend on August 24, creating a bullish divergence. This indicator measures the amount of money flowing into or out of an asset over a period of time.
A CMF bullish divergence occurs when buying pressure for an asset increases, even as its price continues to linger. It often acts as a harbinger of a price rally. Should sentiment improve, the price of CRV is expected to rebound.
Source: CRV/USD, TradingView