CRV price extends losses as Curve tokens flood exchanges, whales shed holdings

• CRV price is approaching the $0.40 level, where $85 million worth of Curve tokens were sold in over-the-counter deals. 
• Curve founder, Michael Egorov, sold nearly a quarter of the token’s circulating supply with “handshake agreement” lockups. 
• Curve DAO tokens are rapidly flooding centralized exchanges and supply held by top addresses has declined throughout August.

Curve DAO’s CRV token’s price is declining rapidly, following the recent developments in the protocol. On July 31, a DeFi exploit wiped out $62 million in funds, triggering an implosion in the ecosystem. The incident left Michael Egorov, Curve’s founder, with a risk of $100 million liquidation on his CRV positions. Read more about the incident here.

Curve (CRV) token’s supply on exchanges has consistently climbed, and top holders of the tokens have shed their supply, starting August 2023. These two metrics are key to determining the direction in which an asset’s price is headed.

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Curve price decline supported by bearish on-chain metrics

CRV price suffered a decline from $0.65 on July 31 to $0.46 at the time of writing. The DeFi token has consistently suffered increasing selling pressure, with CRV flooding centralized crypto exchanges.

Based on data from crypto intelligence tracker Santiment, CRV supply on exchanges climbed from 138.05 million to 148.46 million on Tuesday. A considerable increase in the volume of CRV tokens hitting exchange wallets was accompanied by top addresses dropping their holdings of the DeFi tokens.

According to Santiment, supply of CRV held by the top 1% addresses, decreased from 75.47% (as a percentage of the total supply) to 71.75%. 

CRV supply held by top addresses (as % of the total CRV supply) (red), supply on exchanges (grey) on Santiment

The bearish on-chain metrics support the thesis of further declines in CRV price.

The $0.40 price level is key to CRV, since this is the level at which nearly a quarter of the token’s circulating supply was sold by founder Michael Egorov to crypto firms and influencers through “handshake agreements” to keep the tokens locked.

There remains a possibility that these tokens enter circulation or hit exchange wallets, according to crypto analyst Hsaka.

Hsaka argues that some sophisticated entities have moved their CRV holdings to centralized exchanges, explaining the significance of Curve price drop to $0.40.

Andrei Grachev of DWF Labs clarified why the global market maker moved 2 million CRV tokens to Binance. Grachev asked the community to expect further CRV inflow from the entity, not with the intent of selling, but for other purposes. This development supports a recovery thesis for CRV price in the long term.

At the time of writing, CRV price is $0.46 on Binance. It remains to be seen whether the price drops to the $0.40 level, where Curve is likely to experience heightened selling pressure and volatility.