Crypto Analyst Predicts Astonishing $41 Million Squeeze for DeFi Altcoin
According to a well-known cryptocurrency strategist, a short squeeze could occur for an altcoin project that recently experienced a $41 million hack.
Credible Crypto, a fictitious expert, tweets to his 343,200 followers that Curve (CRV) is seeing a ton of short interest.
The native token on the decentralized finance (DeFi) Curve platform, according to the expert, may cause a short squeeze if it does not immediately decline further from its current value.
When traders borrow an asset at a given price with the intention of selling it for less to pocket the difference, they experience a short squeeze in which they are compelled to buy back the assets they borrowed as momentum shifts against them, leading to more rallies.
“Also worth noting the massive increase in shorts down at these levels. While another swing down seems like the obvious move to me (and clearly many others) the high short interest here could facilitate a squeeze in the opposite direction if we don’t move down soon. The next couple of days will be interesting to say the least.”
The trader predicted that crypto CRV might go from its current price of $0.59 at the time of writing to $0.49, a 17% drop. To determine his bottom price objective, he applies the Elliott Wave theory, which holds that the primary trend of an asset’s price action happens in a five-wave pattern.
“While the dust may be starting to settle on the recent CRV events, we are still waiting on a couple of wild cards that need to be addressed before we can go back to focusing exclusively on the charts. These issues are probably addressed in the next 48-72 hours.
In the meantime and from a purely technical perspective, I don’t think our drop is done yet. If we can get back above the RED ZONE and point of breakdown (POB) then it likely is, but until then I expect that this move down is not yet complete – and looking for a push into the GREEN zone below for now. This is the same zone I highlighted in my prior chart about a month ago – so the levels haven’t changed. Let’s see how things develop over the next couple days.”
A weakness in the programming language Vyper 0.2.15, according to a statement made by Curve on Sunday, allowed for the exploitation of various liquidity pools on the platform. Users in the impacted pools were instructed to take their money out.
