Butterfly Setup: CRV's Path to Bullish Reversal

The Curve DAO Token (CRV) is navigating a critical junction as technical indicators and price action suggest a potential reversal could be on the horizon. After a 16% decline in tandem with broader altcoin market weakness, the token has stabilized near $0.4447, sparking renewed interest among traders. A bearish Butterfly harmonic pattern, a formation historically associated with bullish reversals, is now taking shape on the daily chart, signaling that buyers may be positioning for a rebound if key support levels hold.

The pattern's structure has emerged from a low of $0.5968 at Point X, followed by a decline to Point A, a bounce to Point B near the 0.763 Fibonacci retracement, and a drop to Point C at $0.3991. This C-zone has become a pivotal anchor, with CRV holding steady above this level despite broader market headwinds. Analysts note that as long as the token remains above $0.3991, the harmonic setup retains validity, increasing the likelihood of a bullish CD-leg-a phase where prices typically rally toward the Potential Reversal Zone (PRZ).

Immediate resistance lies at the 40-day moving average near $0.4975. A successful reclaim of this level would provide stronger confirmation of the reversal narrative, potentially propelling CRV toward the PRZ between $0.6537 and $0.7260. These levels, corresponding to the 1.272 and 1.618 Fibonacci extensions, represent a critical test of the pattern's integrity. However, failure to defend the $0.3991 support could invalidate the setup, opening the door for further declines before any meaningful recovery attempt materializes.

The broader market context adds complexity to CRV's trajectory. Ethereum's 22% drop over the past 30 days has exacerbated pressure on altcoins, with CRV mirroring this trend. While the token's recent stabilization suggests short-term buying interest, sustained momentum will depend on broader market conditions and institutional sentiment. Analysts caution that until CRV breaks above the descending trend line from $3.10 or the 50-day EMA at $2.16, bears remain in control.