Battered DeFi Market Continues Descent: Compound, Synthetix, Balancer Slip 10%
The beaten and bruised decentralized finance (DeFi) market has continued its descent despite a rally in Bitcoin’s price. Top coins pertaining to this segment of the crypto space have continued to slide lower.
Coins such as Compound (COMP), Synthetix Network Token (SNX), Balancer (BAL), and a handful of others have dropped in excess of 10% in the past 24 hours.
To put their performance into context, Bitcoin is down by only 0.1% in the past 24 hours. Furthermore, Ethereum has shed 1.8% in the past 24 hours, a performance far better than the coins based on its network.
The decline of these DeFi coins comes as ETH faced a strong short-term drop, dropping from $354 to $345 in the span of 20 minutes. Strong drops in the price of Ethereum have led to strong DeFi corrections over recent weeks.
Namely, at the start of the month, the strong 20-25% drop in the Ethereum price over two days led to a 50% drop in the value of countless DeFi coins.
DeFi Coins Slammed Despite Relative Stagnation in Bitcoin & Ethereum
For DeFi coins at least, it seems that a bear market is playing out.
Leading coins pertaining to this space are in the midst of slipping over 10% lower than they were just 24 hours ago. As aforementioned, the list of underperformers includes COMP, SNX, and BAL. It also includes other prominent names like Uniswap, Nexus Mutual, Yearn.finance, Aave, Maker, and Algorand — all of which are coins for decentralized finance protocols or have services focused on this space.
Chart of ETH's price action over the past day or so compared to the performance of top DeFi altcoins including COMP, SNX, UNI, BAL, MKR. Chart from TradingView.com
The drop in this segment of the cryptocurrency market means that many investors who have siphoned capital into these coins over the past two months are now deeply in the red.
Despite this, there are some DeFi coins that are rapidly gaining traction, though these outliers are largely smaller projects. For one, StealthSwap’s OWL recently raised $1 million in the span of five minutes. The coin proceeded to surge 600% when Uniswap trading opened just minutes later.
A Growing Space
Despite this short-term setback, DeFi is still growing.
Spencer Noon, head of DTC Capital, recently commented on the outlook of the DeFi space, ignoring recent price action:
“The strong fundamental backdrop to #crypto — which is unlike any bull market previously — is that there are billions of cryptodollars coming on-chain to use #DeFi. Unless that shows signs of slowing, we are on track for a multi-trillion dollar aggregate marketcap for the space.”
Andrew Kang, the founder of Mechanism Capital, has echoed the optimism about this space.
Photo by Tim Trad on Unsplash Price tags: xbtusd, btcusd, btcusdt Charts from TradingView.com Battered DeFi Market Continues Descent: Compound, Synthetix, Balancer Slip 10%