On July 31st, a hacker attack caused by a DeFi vulnerability resulted in the loss of nearly $62 million, leading to ecosystem collapse. However, the impact has not ended. According to the latest developments in the Curve Finance protocol, the token price of Curve DAO (CRV) is rapidly declining. As of writing, the CRV price has dropped from $0.65 on July 31st to $0.46.
With CRV flowing into centralized cryptocurrency exchanges, the DeFi token faces increasing sell pressure. According to data from crypto intelligence tracker Santiment, on August 22nd, the supply of CRV on exchanges increased significantly, rising from 138.05 million to 148.46 million.
Furthermore, top addresses have reduced their holdings of CRV tokens. According to Santiment's data, the supply held by the top 1% of addresses decreased from 75.47% (percentage of total supply) to 71.75%. In fact, these two bearish on-chain indicators support the argument for further price decline of CRV.
Percentage of Supply Held by Top Addresses (red), Percentage of Supply on Exchanges (gray), Source: Santiment.
The price level of $0.40 is crucial for CRV because at this level, founder Michael Egorov sold nearly one-fourth of the circulating supply to cryptocurrency companies and influencers through a "handshake agreement" to maintain token lockup.
CRV Price Trend from January 2022 to August 2023, Source: TradingView.
However, cryptocurrency analyst Hsaka suggests that these tokens may still enter circulation or enter wallets on exchanges. Hsaka believes that some established entities have transferred their CRV holdings to centralized exchanges, which explains the significance of the price dropping to $0.40 for Curve.
As of writing this article, the price of CRV on Binance is $0.46. Whether the CRV price will drop to the $0.40 level remains to be seen, but at that level, Curve may experience greater sell pressure and volatility.