Ethereum Price Drop Below This Level Could Mean Bigger DeFi Carnage

Ethereum Price Drop Below This Level Could Mean Bigger DeFi Carnage
фото показано с : newsbtc.com

2020-9-18 18:05

The price of Ethereum (ETH) has dropped from $488 on September 2 to below $380, falling by over 22%. If the correction of ETH continues, traders say decentralized finance (DeFi) tokens could further suffer.

Despite the rally of Bitcoin from $10,300 to over $11,000, DeFi tokens and Ethereum have underperformed.

The daily chart of Ethereum with key levels. Source: Flood, ETHUSD on TradingView.com

Some traders are considering the possibility of a take-profit rally, as investors funnel profits from altcoins back to Bitcoin. Coincidentally, the Bitcoin dominance index rose sharply in the past week.

A Drop Below $350 For Ethereum Gets Dangerous For DeFi Tokens

Since the first week of September, DeFi tokens were hit particularly hard.

The DeFi index perpetual futures on FTX has plummeted by 35% month-to-date, within merely three weeks.

The FTX DeFi index tracks various DeFi-related tokens, including Aave (LEND), Compound (COMP), and Kyber Network (KNC).

DeFi tokens have collectively underperformed, most likely due to the slump of Ethereum. Previous Bitcoin rallies were led by ETH. This time, Bitcoin is the only major cryptocurrency that is maintaining strong momentum.

If ETH drops below $350, a pseudonymous trader known as “Flood” said DeFi tokens could see another major pullback. He said:

“Super important Level for ETH. Currently ETH and it’s ERC20 minions seem to be leading the market, would not be surprised to see another -25% day across the board for DeFi tokens if ETH trades under 350.”

Another 25% drop for the DeFi market after a large correction would hinder its momentum.

Even Yearn.finance’s YFI, which has massively outperformed both Bitcoin and Ethereum since August, has struggled to recover. In the last four days, YFI has dropped by 29% from $43,800 to $31,000.

The 1-hour chart of Yearn.finance (YFI) with key levels. Source: YFIUSDT on TradingView.com Exchanges Are Still Responding to DeFi Demand

For now, cryptocurrency exchanges appear to be expecting the massive demand for DeFi to continue over the long run.

In recent weeks, top centralized exchanges have increasingly listed new DeFi tokens. Major exchanges have historically been reluctant towards listing newly-emerging tokens and often implement a rigorous verification process.

With the DeFi craze, exchanges are acting noticeably faster than before. For instance, when Uniswap’s highly-anticipated governance token UNI launched, Coinbase Pro, Binance, and FTX all listed in 5 hours since its release.

Anthony Sassano, the marketing manager at Set Protocol, said:

“I love the new trend of CEXs listing new DeFi tokens on day 1 because they are scared of losing a massive amount of volume to DEXs if they wait even a few days. I’d really hate to be one of those people who think that DeFi on Ethereum is a joke.”

The clear demand for DeFi, as evident by the climbing total value locked in Ethereum DeFi protocols, could offset the risk of a large-scale pullback.

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$ 0.0182135 (-17.70%)
Объем 24H $1.165k
Изменеия 24h: 74.29 %, 7d: -97.27 %
Cегодня L: $0.0182135 - H: $0.0182135
Капитализация $0 Rank 3233
Цена в час новости $ 1.7733 (-98.97%)

defi eth ethereum could below price correction

Источник: newsbtc.com

defi eth → Результатов: 126


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