- On August 30, Curve Finance launched three dynamic liquidity pools on base.
- However, his TVL has continued to fall.
As part of its attempt to attract new liquidity, Curve Finance has set up a decentralized exchange (DEX) for stablecoins [CRV] launched new pools on the Layer 2 (L2) platform Base on August 30th. However, the protocol’s Total Value Locked (TVL) has continued to drop since then.
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We’re on @BuildOnBase pic.twitter.com/QNrqkUdScz
— Curve Finance (@CurveFinance) August 30, 2023
Is your portfolio green? Check out the CRV profit calculator
TVL’s decline is likely due to continued capital flight from Curve since its inception reentry hack on the 30th of July. In this hack, an attacker exploited a vulnerability in Curve code to steal approximately $73.5 million worth of crypto assets.
The hack shook trust in Curve as many users have since withdrawn their funds from the platform. Since the hack, Curve’s TVL has dropped by 31%.
As of this writing, $2.65 billion worth of assets were locked into Curve, with Base contributing less than 1%. According to DefiLlama data, only $15 million in liquidity has been made available to the three dynamic liquidity pools on Base since their inception.
These pools include 3c (USDbC, axlUSDC, and crvUSD), cbeth (ETH and cbETH), and Tricrypto (crvUSD, tBTC, and ETH).
The CRV decline remains constant, but there’s a catch
At press time, CRV was trading at $0.4406. Data from CoinMarketCap revealed.
After the hack, many feared that Curve founder Michael Egorov’s securities on Aave were threatened with liquidation, putting their CRV investments at risk. On-chain liquidity for CRV plummeted shortly after the hack, and the token’s price has fallen sharply since then as investors increasingly “throw their bags away.”
An on-chain assessment of demand for the alt over the last month revealed a significant drop in the number of daily active addresses involved in CRV transactions and the number of new addresses created to trade the alt.
Source: Santiment
On a daily chart, the main momentum indicators are showing a downward trend. This confirmed the decrease in CRV accumulation since the July 30 exploit. For example, CRV’s Relative Strength Index (RSI) was 27.43 and the Money Flow Index (MFI), which is also below its center line, was 48.61.
Likewise, the alt’s on-balance volume (OBV) is down 14% over the past month. When an asset’s OBV decreases in this way, it means that the selling volume exceeds the buying volume.
Read Curve Finance [CRV] Price prediction 2023-24
However, while CRV’s price was declining, on August 24, Chaikin Money Flow (CMF) started an uptrend, resulting in a bullish divergence. This indicator measures the amount of money flowing into or out of an asset over a period of time.
A bullish CMF divergence occurs when there is increasing buying pressure on an asset even though its price continues to fluctuate. It often acts as a harbinger of a price rally. If sentiment improves, CRV’s price is expected to see a bounce.
Source: CRV/USD, TradingView
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