Curve DAO token saw a 6.6% increase in Open Interest in the past 24 hours, according to Coinalyze stats. Generally, increased speculative activity points toward strong momentum.
During this period, Curve DAO [CRV] prices have gone down 2.63%. The token has also shed 9.9% over the past week.
The wider market was bearish as well, with Bitcoin [BTC] facing rejection at the $90k level on Wednesday.
Does this mean it is time to enter short positions on CRV?
AMBCrypto investigated the higher timeframes to determine if a bullish reversal or bearish continuation is likely next.
Multi-timeframe analysis hints at this CRV move next
Source: CRV/USDT on TradingView
The weekly chart showed a bearish swing structure after falling below $0.49. Additionally, the March support at $0.37 has also failed to hold back the bears.
The A/D indicator was sliding lower over the past month, showing increased sell pressure. The MACD also underlined heavy downward momentum on the weekly timeframe.
Source: CRV/USDT on TradingView
Zooming in on the 6-hour timeframe, Curve DAO token showed a short-selling opportunity. The trend was bearish and there have been two quick-fire bearish structure breaks on this timeframe.
Additionally, the fair value gap, or imbalance, overhead up to $0.38 (white box) was tested before a bearish continuation.
Discussing the invalidation point for the bears
The structure, momentum, and volume indicators across the two timeframes showed that bears have the upper hand.
Traders going short would have their idea invalidated upon a CRV price bounce past the imbalance at $0.38.
Traders’ call to action – Here’s the next target
Using the weekly chart, the next bearish target can be determined.
It is the $0.243 support, where the Curve DAO token was trading from July to November 2024. On the way, the $0.329 and $0.298 would be short-term support levels that could halt a bearish move.
Final Thoughts
- The increased speculative interest in CRV alongside a price drop suggested strong bearishness in the market.
- The weekly and 6-hour chart gave a trade setup with a clear invalidation favoring the downside.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Source: https://ambcrypto.com/dissecting-curve-daos-price-action-as-crv-eyes-another-support-test/
