Up to $40K, Bitcoin stimulates the decentralized finance (DeFi) market. AAVE, UNI, LUNA, LINK, SUSHI… jump from 20% to 50%.
When Bitcoin goes, everything goes. That’s how we could interpret the tendency in the cryptocurrency market. After a weekend of growth and then a Monday in a flurry, the price of BTC rose to $40,000.
This rebound of more than 10% in the space of a few hours catapulted many tokens, especially in the decentralized finance sector (DeFi). And even though Bitcoin is now showing a pullback to just over $37K, the gains remain positive over 7 days.
52% for Terra (LUNA) and up to 145% for DEGO
The same is true for the major DeFi protocols, as reported by CoinMarketCap. Over 24 hours, native tokens are down between 2% and 5%. Over a week, however, the gains are still very significant.
The decentralized lending and borrowing protocol Aave (AAVE) has the wind in its sails over the period with a price that takes off by more than 40% to 301 dollars. Its direct competitor, Compound, has nothing to be ashamed of with a 20% increase and a price of 392 dollars.
Among the DEX, the dynamics are globally the same. Uniswap (UNI) is up 26% to $18.55. SushiSwap (SUSHI) jumps 36% to $8.28, besting Synthetix (SNX) at 23.8% and $9.11.
But among the DeFi majors, the biggest growth goes to Terra (LUNA). The stablecoin issuing specialist is up nearly 52% over the past 7 days. On the other hand, over 24 hours, it is giving up nearly 5% in an overall DeFi crypto market that is down slightly by 0.7%.
This is due to meteoric growths for some decentralized finance tokens. Tokens such as DEGO, HEGIC, CHR, REP, XVS, RSR recorded increases of over 70% over the period. For DEGO, it’s even 140% growth over 7 days and another 14% over 24 hours, against the grain of other crypto-currencies on the market. With a capitalization of only $93 million, however, DEGO is not in the same league as giants like UNI or AAVE.
To keep up this pace, not only DeFi, but also other crypto tokens will need a strong Bitcoin. According to analysts, however, the $40K resistance will be hard to overcome. Now, after reaching $40,500, BTC was quickly falling back to around $37,500. Analysts are therefore cautious and are still hesitant to talk about a return of the bull-run.
Crypto trader Ed is much more cautious. He doesn’t rule out a return to the $29,000 mark based on his previous predictions and the Elliot wave, even if Bitcoin were to rise above $42,000. Crypto Ed, however, mentions an invalidation of the price lows in the $26,000 – $27,000 area mentioned in his previous analysis, if the bulls break the $41,500 – $42,000.
But last week, well before this bullish move, an expert from Bloomberg, said that Bitcoin was more likely to rise back towards the $60K mark instead of sinking below $20K. He compared Bitcoin’s current situation to 2018 when the cryptocurrency’s price dropped by 80% after a rise towards $4000. Shortly after the crash, BTC would begin a rally towards $14K that extended into 2019.