The DeFi boom, witnessed between March and August, is slowly decreasing, but it is not the only thing that is falling
The decrease in the clamor around DeFi has negatively impacted the currencies, resulting in price drops of 93% from the 250 major currencies this month. Token prices for many DeFi protocols, including Chainlink, Synthetix, Compound and Yearn Finance, have increased in recent months. Consequently, this generated conversations about the arrival of the bull season.
ETH prices went from $ 100 in March to $ 470 in August as a result of the DeFi euphoria in Ethereum.
A market study, however, reveals that the fuss has subsided in recent weeks, causing a downward cycle in the market. This can be seen in the price of ETH, which has fluctuated around $ 350 in the past two weeks.
A CoinMetrics report shows that 72% of the top 250 cryptocurrencies saw price drops week after week. The number rises to an impressive 93% by conducting a monthly analysis. A review of the DeFi chart by Messari, in September, shows the majority of DeFi tokens corrected in the range of 15% and 85%.
It is certain that the downturn is worrying most investors as they decide whether the positive run should end or not. Even so, trend reversals are not an unpopular occurrence in bull markets. The 2017 bull market, for example, had several price retractions.
Earlier that year, Bitcoin reached $ 1,180, a level that generated a huge sale, and the cryptocurrency fell by almost 40%. Still, this did not prevent the currency from reaching its all-time high of around $ 20,000 at the end of the same year.
DeFiWorld, at this week’s launch, labeled corrections as a normal occurrence that is part of a much larger trend. The newsletter made comparisons with a similar occurrence in 2016. Part of the newsletter said:
“We move in bubbles and cycles for 4 years. While everyone is just thinking about what happens today, this week or this month, you should zoom out and reflect where we’re really going. The long-term trend is clear: it is upward ”.