Has the CRV painful dip come to an end? This upcoming event in August could potentially ignite a rally for the token.
The past year has seen the CRV token of Curve Finance, the decentralized exchange for stablecoins, plummet. Last week, the token experienced a significant plunge, dropping by as much as 75% from its highs in March 2024. This decline was cause for concern for CRV token holders.
However, an analyst suggests that the bottom may be in sight, pointing to favorable fundamental events in approximately two months that could drive the token’s price up to $2. Currently trading at around $0.32, CRV has already seen a 42% increase from last week’s lows.
A promising sign is the stabilization of prices, particularly after the flash crash on June 13, where prices fell to $0.22. The presence of a long lower wick indicates increasing demand as the trading day came to a close. This demand continued the next day, with prices closing higher and bulls further extending gains over the weekend.
While it remains uncertain if the June 13 plunge marks the end of CRV’s troubles, the recent 45% recovery from last week’s lows combined with the growth of Ethereum prices could generate more demand for the token, potentially propelling it towards the $0.40 mark.
The analyst also highlights significant developments ahead for Curve Finance as a protocol and CRV as its primary token. In mid-August, there will be a reduction in the token’s inflation rate, from 20.37% to as low as 6.34%. This shift is primarily due to the protocol’s transition to CRV distribution.
Starting on August 12, Curve will no longer allocate CRV to the core team for vesting, opting instead to distribute the token directly to the community via gauges. This change will significantly reduce inflation. Gauges play a crucial role in determining how CRV is distributed to different liquidity pools, ensuring a decentralized approach. Token holders can now vote on the amount of CRV that liquidity providers in a particular pool receive as an incentive.
In addition to the redistribution of CRV, the liquidation of Michael Egorov’s position addresses the issue of bad debt, allowing Curve to generate real revenue for CRV holders and consequently boosting the token’s value.
The analyst envisions Curve evolving into a leading decentralized Forex market in the coming years. As one of the largest DeFi platforms, Curve Finance currently boasts a total value locked of over $2.2 billion, according to DeFiLlama.
It’s essential to consider these potential developments and their impact on CRV, as they may contribute to a turnaround and potentially spark a rally for the token.
(Note: This text has been modified from the original for uniqueness.)