January 13, 2022

Crypto Watchlist: Bullish Divergence on Curve (CRV)

 A new longer-term setup hits the watchlist this week on Curve DAO (CRV), as the recent dip on the daily chart created a couple of interesting setups for crypto traders to watch out for.


CRV/USD: Daily

For those looking for a longer-term, blue chip type exposure to decentralized finance, then Curve DAO (CRV) may be up your ally. This is the governance token for Curve Finance, a DeFi protocol that mainly focuses on pegged asset trading (e.g., stablecoin vs. stablecoin pairs), and it’s a beast with around $25B in total-value locked (TVL) at the moment–the largest in all of crypto land! Holders who stake CRV receive a portion of the trading fees generated by the protocol, as well as have the right to vote on changes to how the protocol works. 



Given the protocol’s massive size of both value locked and activity (over $60B in volume per month), CRV’s  price growth shouldn’t be a surprise and makes it a good candidate for longer-term bulls. That makes the recent dip in CRV/USD very attractive for investors to check out at the moment.


On the daily chart above, we can see that CRV/USD has pulled back with the rest of the digital asset space over the past two months, falling from an all-time high around $6.80 to an early 2022 low of $4.00. This not only brought the pair back to the rising ‘lows’ pattern marked on the chart above, but also formed a bullish divergence pattern that may start attracting technical traders to the long side.


And with market sentiment shifting less negative this week after Fed Chair Powell calmed balance sheet reduction fears (short-term bearish for the U.S. dollar?), and after getting steadier inflation rate data from China and the U.S., the odds of the uptrend in CRV/USD holding is improving nicely.


Of course, if a catalyst comes along to push the pair beyond the rising ‘lows’ trendline, then look out for a potential move to the $3.00 handle as fresh sellers/profit takers may join the game. 



We’ve still got plenty of global inflation updates coming over the next week that could shake up the macro picture so we’ll stay in watch mode for now. But what do you all think? Is CRV a buy or sell?