The recent downtrend across the aggregated crypto market has affected the DeFi sector. However, it was not able to compete with the Bitcoin and ETH’s momentum. It was a result of the recent rallies. Moreover, there are two key metrics which are suggesting how bullish DeFi is.
DeFi tokens are considered to be “high beta”. It is because of their intense volatility. This implies that when investors are comfortable and confident that the macro landscape is stable, that is the only time that their prices will rise.
The DeFi sector may keep on stagnating unless BTC and ETH would stabilize around their current price levels.
One analyst is saying that from a fundamental standpoint, this crypto market’s relatively small fragment is still amazingly bullish.
To support this claim, he mentioned the market capitalization and the total value locked of ERC-20 stablecoins.
He also said that the quality tokens within the space will begin rising again will depend on timing although DeFi stays bullish.
DeFi Sector Stagnates Despite Rallies Seen by Broader Crypto Market
In late-August, Bitcoin went down from highs of $12,400. This decline started chaos in the entire market. As a result, the DeFi sector experienced a short-term downfall.
On the other hand, BTC and ETH are now rebounding. ETH is currently going up towards its yearly highs and BTC performs fresh highs.
This means that soon, the capital may indulge over into higher risk crypto assets. However, it is still not clear when would this rotation might occur.
Investor: Two Key Metrics Suggest How Bullish DeFi Is
In a recent tweet, one well-known crypto investor discussed that at the present moment, there are two key metrics show just how bullish the DeFi market truly is.
He emphasized the total value locked of $12.41 billion. The investor also mentioned the $14 billion stored within ERC-20 stablecoins.
He thinks that the election would be a turning point for phase 2 of the bull run.