Curve (CRV) sees 150% rebound as DeFi bottoms and ETH gas fees drop
|Falling Ethereum gas fees, the launch of Convex Finance and the DeFi sector reaching a potential bottom back CRV’s impressive 150% rally since May 23.
DeFi tokens and protocols took a heavy hit on May 19 as Bitcoin price dropped to $30,000 and while BTC has entered what some analysts describe as a 'compression' phase, the total value locked in DeFi and the value many of the sector's tokens have yet to rebound to the levels seen before the market crash.
Curve DAO token (CRV) stands among the few DeFi tokens that have seen a strong recovery over the past two weeks due to reduced Ethereum gas fees, the launch of Convex Finance and the DeFi sector beginning to find a bottom.
CRV/USDT 4-hour chart. Source: TradingView
Data from Cointelegraph Markets Pro and TradingView shows that CRV has increased 55% since June 1, rallying from a low of $1.76 on June 1 to an intraday high at $2.76 on June 3 alongside a 250% increase in 24-hour trading volume.
Convex Finance launch attracts CRV holders
One source of the sudden rise in price and momentum for CRV is Convex Finance (CVX), an optimizer for the Curve Protocol that enables swaps of similar assets like stablecoin to stablecoin transactions.
Introducing Convex Finance! A new platform, built by Defi Natives, to simplify your Curve-boosting experience to maximize your yields.
— Convex Finance (@ConvexFinance) April 15, 2021
Read more here! https://t.co/65Dog7RdqE
Since it’s official launch on May 17, the Convex protocol has rapidly gained a substantial user base thanks to yields as high as 52.16% and some analysts have suggested that the protocol is challenging Yearn.finance for CRV-related deposits.
Data from Defi Llama shows that in the two and a half weeks since the launch of Convex Finance, the total value locked (TVL) on the protocol has surpassed $2.3 billion with stakers on the protocol earning $4.3 million in total revenue.
Both Convex Finance and Yearn.finance rely heavily on CRV for the operation of their platforms and the increased activity has resulted in a decline in the circulating supply of CRV. This may have helped to boost CR price as investors clamor to stake tokens for the highest return possible.
Curve Finance and the wider DeFi ecosystem could also be benefitting from the sharp decline in gas fees on the Ethereum (ETH) network, which had previously priced out many retail traders from performing the simple approval and confirmation transactions required to stake and claim earnings from DeFi protocols.
Average Ethereum gas fee. Source: Etherscan
Lower fees have allowed a wider range of users to re-engage with their favorite DeFi protocols, and Curve has been a significant beneficiary of this development.
The VORTECS™ indicator flashed before the breakout
VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for CRV on May 31, prior to the recent price rise.
The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
VORTECS™ Score (green) vs. CRV price. Source: Cointelegraph Markets Pro
As seen in the chart above, the VORTECS™ Score for CRV registered bullish readings throughout the past week with a high of 77 coming late in the day on May 31. This was roughly 15 hours before the price rallied 55% over the next 48 hours days.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.