The Curve DAO token (CRV) managed to defend the 252-day support line
Date: 2023-08-04 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of Curve DAO (CRV) was able to avoid breaking the long-term support level thanks to a strong rebound on August 1
The age of this support line is 252 days. Therefore, the direction of the further trend on Curve DAO may depend on whether its market will break through or it will remain intact.
Curve DAO is trading at a key level after the bounce
At the opening of the week, the Curve Finance project faced a major hack, which led to the loss of assets worth more than $40 million and a sharp drop in the price of the native token Curve DAO (CRV). Even worse, the consequences of the Curve Finance hack immediately began to spread throughout the ecosystem, threatening even such heavyweights as the Aave protocol.
According to the results of the proximate analysis of the daily chart, CRV has been growing along the ascending support line since November 2022. By now, the price has already bounced off this line three times (green icons). However, after the third bounce on July 30, the token dived below this line the next day, falling to a minimum of $0.48.
However, a rebound followed, and the price formed a long lower wick, confirming the horizontal area of $0.48 as support. The bounce saved the price from falling to a new annual low. Now the Curve is trying to recover above the ascending support line, which has been on the chart for 252 days now, if we do not take into account the current supposed breakdown.
A recovery above this line can lead to a 50% rise in the coin to the next resistance level of $0.88. Meanwhile, a bounce from it will most likely lead to a drop to the $0.48 support area.
The daily RSI gives bullish signals, supporting the continuation of the rebound. This momentum indicator is below 50, but it has generated a significant amount of bullish divergence signals (green line). This is a phenomenon when the price drop is accompanied by an increase in momentum, which reduces the significance of the price drop. Such divergence often precedes strong upward movements.
Forecast of CRV: decrease may be corrective
Meanwhile, the wave analysis of the daily time frame suggests that the growth of the Curve, which began in November 2022, represents a five-wave bullish price structure (white color).
If this is true, then the subsequent decrease is a correction. The fact that it passes inside the descending parallel channel is consistent with this possibility.
However, the price is still trading at the bottom of the channel. To confirm the bullish trend of the market, it is necessary to make a bullish breakout from it.
If this happens, then Curve can grow by 170% and reach the next resistance at the level of $1.55.
Despite such a bullish forecast, CRV closing below the channel support line would mean that the trend remains bearish. In this case, the low of November 2022 may not hold, and the price will fall another 47% to $0.30.
