Potential liquidation would add to downside pressures on CRV, injecting volatility into the broader market.Decentralized exchange Curve's CRV token continues to lose ground as the looming threat of potential large liquidation of the founder's borrowed position has traders piling into short positions.
Early Tuesday, the cryptocurrency fell to around 5 cents, reaching the lowest since Nov. 22, according to CoinDesk data. Prices are down roughly 30% since Curve fell victim to a reentrancy attack late Sunday. The notional open interest in perpetual futures tied to CRV has doubled to $106 million alongside deeply negative funding rates, according to data source Velo. This is generally a sign of traders shorting or betting on a price decline.The bearish positioning likely stems from fears that the potential liquidation of Curve founder Michael Egorov's large borrowing positions on Aave and Frax may destabilize Curve and the wider crypto market.
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