Altcoin projects that started the week with record rallies were victims of whale games. Now, one DeFi altcoin is in the middle of a similar manipulation.
Whales dump this altcoin project flowing to stock markets
CRV, the management token of DEX platform Curve, hit two-year lows earlier today. Meanwhile, Bitcoin and Ethereum were pushing historical bottoms. CRV price tumbled as low as $0.40 before peaking at $0.6238 on the day. At the time of writing, it is trading at $0.5731 with support from this region. It is trading in the green 15% compared to the last 24 hours with very fluctuating price movements during the day.
The DEX token is becoming volatile amid the rise in the number of cryptocurrencies held on centralized exchanges. On November 22, it fell 17% to a two-year low of $0.40 before wiping out losses with a V-shaped recovery. It recently returned to the positive zone, accompanied by new buyers from here, and recovered up to $0.53.
Glassnode data reveals that the number of CRVs held in central exchange wallets has increased by 70% this month. The number of CRVs flowing to central platforms reached a record level with 148.91 million. The number has increased 46% in the last 24 hours alone.
CRV flowing to centralized exchanges increases sales significantly
Crypto traders often transfer funds from their wallets to exchanges when planning to sell their positions. The developments in the CRV market are notable as Curve, which specializes in stablecoin swaps, is the largest source of liquidity in the DeFi industry. Any issue with Curve has the potential to directly affect the cryptocurrency market as well.
Altcoin whales increase pressure as price hits highs
CRV’s exchange balance rose amid reports that a whale was transferring large amounts of borrowed tokens to centralized exchanges. According to several Twitter-based researchers, including Lookonchain, the whale recently borrowed nearly 20 million CRVs from DeFi lending giant Aave. He then transferred half of it to OKEx, possibly to sell it. The balance held at OKEx has increased by 11.3 million this month, according to Glassnode data.
The latest issue of the Curve newsletter referred to whale activity as a “big short”. At the moment, CRV’s short-term prospects look bleak. This is because the increase in the foreign exchange balance is accompanied by a lack of incentives.
A huge $CRV shorter borrowed 20M $CRV($9.9M) from #Aave and transferred 10M $CRV($4.9M) to #OKEx.
He has lent 37M $CRV from #Aave in the past 7 days.
The price of $CRV dropped from $0.625 to $0.464, a decrease of about 26%.
Now he is dumping the 20M $CRV he borrowed! pic.twitter.com/sSiMqEE5C3
— Lookonchain (@lookonchain) November 22, 2022
Markus Thielen, head of research and strategy at Matrixport, comments on the impact of events at FTX. “While there are winners after FTX, the lack of user interaction will hurt them in the short run,” the expert says. Thielen further adds, “Genesis and DCG increase the risk of fire sale for individual tokens.” In terms of investor appetite, it reveals a declining one after recent events:
There is less interest from users in providing their tokens to liquidity pools or even locking them in terms of total value (TVL).
The FTX crash in November, which you are following on Kriptokoin.com, injected a lot of volatility and fear into the market. He saw big breakthroughs in Curve between November 8 and November 13. Curve’s TVL fell to $3.78 billion, its lowest level since February 2021.
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