CRV’s Price Dips 13%: Micheal Egorov Suffers Huge Liquidation
Michael Egorov, the founder of Curve Finance, faces a huge liquidation after a sharp decline in CRV’s value, highlighting the risks of leveraging in volatile markets.
The Curve DAO token’s (CRV) price recently plunged, causing Curve Finance founder Michael Egorov to lose 918.83K CRV tokens, valued at about $882.66K. The token lost 12% of its value within 24 hours.
This liquidation strongly reminds us of the risks involved in volatile markets when trading with huge leverage. This price drop evidences traders’ struggles when the market becomes unpredictable.
Egorov’s CRV Position Liquidated
This liquidation occurred after Egorov purchased 1.08 million CRV tokens for $1.2 million. This buyback, executed at an average price of $1.114, occurred just two days before the liquidation and marked his first large purchase of Curve DAO Tokens since a similar event in June 2024.
According to insight from on-chain analytics firm SpotonChain, Egorov’s buyback occurred on December 17. Then, in less than one week, CRV’s price took a 13% dive within 24 hours, and his holdings were liquidated.
PeckShield reported that the liquidation occurred due to the margin calls that followed the rapid price drop, emphasizing the perils of holding large leveraged positions in a volatile market.
Egorov Responds to Liquidation Event
In response to the liquidation, Egorov clarified that the tokens involved were not part of his regular holdings. Rather, they were “receipts of the repayment from the June 10 hack he suffered.”
Despite his clarification, the liquidation still raised concerns within the community regarding the broader performance of the Curve DAO token. CRV’s price dropped by 7.8% shortly after Egorov’s buyback, which added to market uncertainty.
CRV Token Faces Continued Sell Pressure
During the liquidation period, the token reached a low of $0.90. Despite a market capitalization of $1.17 billion, CRV noted a daily trading volume of $536 million.
While such a huge trading volume might have been expected to lift the token’s performance, the token continues to reflect an overall bearish sentiment. This liquidation event underlines how leveraged positions are vulnerable during sudden turbulence in the market.
Egorov’s $1.2 Million CRV Token Purchase
Before the liquidation event, Egorov bought 1.08 million CRV tokens for $1.2 million, signaling his confidence in the long-term potential of Curve DAO. The transaction comes after a period of financial struggles for Egorov, highlighted by his need to liquidate substantial quantities of CRV tokens earlier in the year.
In June, he sold $141 million worth of CRV tokens and acquired stablecoins valued at $95.7 million. These moves coincided with a decline in the value of CRV and the pressures of leveraging tokens for borrowing purposes.
The decision to accumulate more CRV tokens indicates that Egorov is betting on a price recovery in light of the recent developments within the Curve DAO ecosystem. However, the move has backfired with the liquidation event.
Trading Activity Heats Up Despite Liquidation Event
Based on current market conditions, CRV’s price recovery could be slow after this liquidation event. The token is down 13.3% over the last 24 hours, trading at $0.896.
Curve Finance recently launched its yield-bearing stablecoin (Savings-crvUSD or scrvUSD), which increased investor interest in the ecosystem. Moreover, the stablecoin’s staking volume surged to its highest level since June 2022, jumping from $455.31 million to $839.29 million on November 27.
On December 3, the daily trading volume of Curve DAO Token reached $1.6 billion, indicating a rise in market activity. The combination of these two events drove renewed optimism in the CRV token, rising above $1 for the first time since April.
Curve DAO’s recent performance has been decent following the launch of its stablecoin. Curve’s year-to-date revenue for November was over $36 million, a 23% rise from the previous month.
Earlier this week, the token traded between $0.30 and $0.80, but it’s now trading above $0.85 due to increased market interest in scrvUSD and rising transaction volume.
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