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Bitcoin Falls 1.2% as Curve Chaos Sparks Systemic Crisis Fears in DeFi
CRV has bounced 20% since Justin Sun organized some relief for the token, but remains 23% lower this week.
Updated Aug 1, 2023, 6:23 p.m. Published Jul 31, 2023, 10:06 p.m.
The crypto market was off its worst levels, but remained down across the board on Tuesday afternoon as risk-off sentiment continued following last weekend's exploit of Curve Finance and Monday's court ruling potentially throwing into question June's legal victory for Ripple's XRP.
Bitcoin (BTC), the top cryptocurrency by market value, slipped 1.2% to $28,890, leading the CoinDesk Market Index (CMI) to a 1.7% decline.
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Curve's native token CRV is down 4% over the past 24 hours to $0.59, but earlier Thursday had slid to as low at $0.50 before Tron blockchain founder Justin Sun purchased more than $2 million worth of the token and pledged additional assistance through a liquidity pool set up on the Tron network.
CRV's jitters dragged down other prominent decentralized finance coins like COMP, FXS, and AAVE.
Read More: Traders Pile Into CRV Shorts Amid Concerns Over Curve Founder's Collateralized Borrowing
Dinging market sentiment, particularly among altcoins, a federal judge – in an otherwise unrelated case involving the SEC's lawsuit against Terraform Labs – rejected the distinction made by another judge last month in the Ripple case between public and institutional sales of the payments focused cryptocurrency XRP.
XRP is lower by 1.4%, while the native tokens of Solana, Cardano, Polygon and Stellar are all down 2%-3%.
Read More: Judge Rejects Ripple Ruling Precedent in Denying Terraform Labs' Motion to Dismiss SEC Lawsuit
In an email to CoinDesk, Dave Weisberger, the CEO and co-founder of algorithmic-trading platform CoinRoutes, noted altcoins downward drift following the HEX suit, although he added that it involved a "misappropriation of funds" and did not indicate anything structurally wrong with the broader market.
“In general, we’re in the dog days of summer and in turn seeing relatively low volumes for Bitcoin along with Ethereum," Weisberger also wrote, but added that "larger-size buyers" seemed to be accumulating bitcoin as the price recently dropped.
"Sentiment has improved...," but "...the market seems to be in a holding pattern," he wrote.
See more: Get professional-grade crypto data and news at CoinDeskMarkets.com
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Bitcoin’s Deep Correction Sets Stage for December Rebound, Says K33 Research
K33 Research says market fear is outweighing fundamentals as bitcoin nears key levels. December could offer an entry point for bold investors.
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- K33 Research says bitcoin’s steep correction shows signs of bottoming, with December potentially marking a turning point.
- The firm has argued that the market is overreacting to long-term risks while ignoring near-term signals of strength, like low leverage and solid support levels.
- With likely policy shifts ahead and cautious positioning in futures, K33 sees more upside potential than risk of another major collapse.
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