Curve DAO Token (CRV) Analysis: Founder Faces $882K Liquidation After 12% Crash

Michael Egorov, the founder of CurveFI, experienced a major liquidation event on December 19 following an 12% drop in the price of Curve DAO Token (CRV) within 24 hours. 

Meanwhile, this event resulted in the loss of 918,830 CRV tokens, valued at approximately $882,660. The development follows Egorov’s recent buyback of 1.08 million CRV tokens, which he purchased for $1.2 million at an average price of $1.114 per token just two days earlier.

The sharp price decline and subsequent liquidation have raised concerns about the risks of leveraged trading in volatile markets. Analysts have pointed to this event as a cautionary reminder of the dangers of holding large leveraged positions in unpredictable market conditions.

Price Drop Triggers Margin Call and Liquidation

The liquidation of Egorov’s position occurred as the price of CRV dropped by 12% in less than 24 hours, following a broader decline of 18.89% over the past week. Data from Spot on Chain indicates that Egorov’s buyback took place on December 17, in what appeared to be an attempt to strengthen his position in Curve DAO Token. 

However, the sudden downturn in CRV’s value triggered margin calls, forcing the liquidation of his position.

Blockchain security firm PeckShield confirmed that Egorov’s account was liquidated, with the 918,830 CRV tokens worth approximately $882,660 being sold. This event underscores the vulnerability of highly leveraged positions during periods of extreme market volatility.

#PeckShieldAlert #Liquidation Michael Egorov-labeled address (0x7a16…5428) has been liquidated for 918.83K $CRV (totaling $882.66K). pic.twitter.com/ZXehpFZT81

— PeckShieldAlert (@PeckShieldAlert) December 19, 2024

Egorov Addresses Liquidated Tokens

In response to the liquidation, Egorov clarified that the tokens involved were linked to a previous security incident. He stated that the liquidated CRV tokens were “receipts of Sifu’s promise to repay the hacked funds” and not part of his active holdings. This reference points to the June 10 “uwu” hack, during which funds were reportedly stolen from Egorov.

Despite this clarification, the liquidation has added to concerns regarding the performance of Curve DAO Token. Following the liquidation event, CRV experienced an additional 7.8% decline, compounding the losses already seen earlier in the week.

Technical Analysis Signals Bearish Momentum

Technical indicators show a potential shift in market sentiment for Curve DAO Token. The 9-day Exponential Moving Average (EMA) remains above the 26-day EMA, suggesting the token is still in an overall uptrend. However, the narrowing gap between the two lines indicates a possible reversal in momentum.

Source: TradingView

The Relative Strength Index (RSI) is at 51.97, hovering near neutral territory. This suggests that CRV is neither overbought nor oversold, but a drop below 50 could indicate weakening bullish momentum. 

The Moving Average Convergence Divergence (MACD) shows a slight downward trend, with the MACD line below the signal line, signaling mild bearish pressure.

As of press time, Curve DAO Token was priced at $0.9371, with a 24-hour trading volume of $596.3 million and a market capitalization of $1.17 billion.

FAQs:

What caused Michael Egorov’s CRV liquidation?

A sudden 12% drop in CRV’s price triggered margin calls, leading to the liquidation of his leveraged position.

What was the value of the liquidated CRV tokens?

Egorov lost 918,830 CRV tokens worth approximately $882,660 during the liquidation event.

What is the current price of Curve DAO Token (CRV)?

CRV was priced at $0.9371 at press time with a 24-hour trading volume of $596.3 million.