Three major reasons have backed CRV in its impressive recent rally that started on 23rd May. This includes the sector of DeFi potentially reaching a bottom; Convex Finance’s launch and gas fees of Ethereum falling.
CRV Had Withstood The Fall Of Bitcoin
On 19th May, DeFi protocols and tokens had suffered a massive hit as the prices of Bitcoin fell to $30,000. Now, analysts say that BTC has begun a phase called “compression”. However, the value locked up in DeFi and many other tokens of the sector are yet to get back to the pre-crash levels.
The DAO token called Curve (CRV) is one of the few tokens under DeFi that has recorded an impressive recovery in the duration of the previous two weeks. The entire sector of DeFi feeling like a bottom has been reached; Convex Finance’s launch; and decreased gas fees of Ethereum have kept powering it.
TradingView and CoinTelegraph Markets data indicate an increase of 55% for CRV since 1st June. The rally started from the lowest point which was $1.76 on 1st June. On the day of 3rd June, it reached a high of $2.76. This was accompanied by a daily increase in trading volume of 250%.
Convex Finance is a major power behind the momentum of CRV. It is designed to optimize Curve Protocol by enabling swapping similar assets like transactions involving two kinds of stablecoins. It was officially launched on 17th May. Since then, a substantial amount of users have started using this protocol because of the high 52.16% yields. Several analysts have even suggested that Convex protocol is a challenge to Yearn.finance regarding deposits related to CRV.
The DeFi ecosystem including Curve Finance is also possibly benefitting from ETH gas fees declining sharply. The lesser fees are allowing more users to engage with favorite protocols of DeFi once more.