Curve DAO (CRV) surges 25% to $1 on short squeeze and U.S. policy optimism

Curve DAO (CRV) experienced a significant surge, with its price increasing by 25% to reach $1 on Thursday, July 17. This rally was driven by a short squeeze, where short sellers were forced to cover their positions, leading to a substantial increase in the token's price. The bullish momentum was further fueled by positive legislative developments in the U.S., contributing to a broader market optimism for altcoins. Over the past seven days, CRV registered a 70% gain, reflecting the strong market sentiment.

The surge in CRV's price was accompanied by a notable increase in short liquidations, totaling $4.9 million over the past 24 hours. The majority of these liquidations, amounting to $3.9 million, were short positions, primarily on major exchanges. This liquidation event likely had a compounding effect on CRV's price, as short sellers were compelled to buy back CRV tokens to cover their positions, driving the price higher in a classic short squeeze scenario.

Despite briefly correcting to $0.9763 after breaking the $1 psychological resistance, there are indications that CRV's price could continue to rise. A significant portion of CRV tokens, 60.19%, are currently locked as veCRV, with 80% of these tokens locked until 2029. Locking up veCRV tokens, for periods ranging from one week to four years, grants holders increased voting power in governance proposals. This mechanism incentivizes long-term holding and reduces the circulating supply of CRV tokens, positioning the token for potential growth in the near future.