The price of Curve DAO token ($CRV), a key player in the decentralized finance (DeFi) space, plummeted by 20% after leveraged positions said to be held by the protocol’s founder, Michael Egorov, started being liquidated, leading to significant selling pressure.
According to blockchain analytics firm Arkham Intlligence, Egoov’s addresses have borrowed $95.7 million worth of stablecoins – most of thm in crvUSD – against $141 million worth of Curve DAO token across five accounts on five different protocols.
Per the firm, Egorov was paying $60 million annualized to keep the position open, and the $140 million CRV collateral was nearing liquidation.
$140M CRV nearing LiquidationCurve founder Michael Egorov is currently borrowing $95.7M in stablecoins (mostly crvUSD) against $141M in CRV, across 5 accounts on 5 protocols.Based on current rates, Egorov is paying $60M annualized in order to keep his positions open on… pic.twitter.com/ipTlWLZOAx
— Arkham (@ArkhamIntel) June 12, 2024
A Debank profile monitoring Egorov’s wallet, as CoinDesk reported, reveals that these loans originated from Inverse, UwU Lend, Fraxlend, and Curve’s own LlamaLend platform, and that the portfolio’s value has plunged by around 58% over the last 24-hour period to around $16.3 million.
On-chain transactions suggest Egorov took steps to manage the situation. Early Thursday, he reportedly repaid portions of the loans on Inverse and LlamaLend using FRAX, DOLA, and CRV tokens. Additionally, data shows there were swaps between CRV and USDT from some associated addresses.
Source: Debank
The liquidations of Egorov’s large position affected other decentralized finance protocols, as CRV is used as a trading pair and stabilizing factor in various trading pools within the ecosystem.
This incident marks the second time Egorov’s borrowing activity has impacted the crypto market. In 2023, an exploit targeting several Curve lending pools triggered a sudden dump in CRV prices, jeopardizing over $100 million in potential liquidations.
CRV Price Analysis
Technical analysis of CRV’s price on the CRV/USDT trading pair shows that the cryptocurrency’s price is undergoing a general bearish trend as prices have been steadily declining.
The large decline that resulted from the liquidations of Egorov’s position led to a quick short rebound, suggesting there’s buying interest at lower prices. The price chart seems to suggest there’s resistance around the $0.45 level as CRV’s price struggled to break above it before collapsing, and support around $0.3 as it quickly bounced back from tht level after its sharp drop.
CRVUSDT Chart via TradingView
Trading volume surge during the crash, but maintained higher levels during the recovery, suggesting strong buying interest at those levels. CRV is currently trading at $0.297
Featured image via Unsplash.