The Ethereum-based DeFi sector took a major hit throughout the past couple of weeks, with Bitcoin and Ethereum’s recent price decline creating shockwaves that have had grave impacts on smaller altcoins.
There are a few tokens that fall under this category that have been able to avoid the immense selling pressure brought about by the recent market-wide downturn, with Yearn.Finance, Aave (LEND), and Loopring all maintaining their recent gains.
The aggregated sector – although down 50 percent from the start of the month – has since caught some slight momentum that has allowed many tokens to recoup some of their recent losses.
Continued interest in DeFi and unprecedented yields across platforms may suggest that there is still room for serious upside.
DeFi sector rocked by recent Bitcoin and Ethereum downtrend
Throughout the months of July and August, DeFi tokens were all the rage amongst traders and investors, with many posting parabolic gains that were emblematic of the returns seen by altcoins in 2017.
This hype cycle was hit hard by Ethereum’s plunge from highs of $490 to lows of $320, which came about in tandem with Bitcoin’s plunge from $12,400 to $9,900.
Many of the tokens within the decentralized finance sector erased a bulk of their recent gains, with investors fleeing to quality due to the turbulence amongst the major digital assets.
According to data analyst Ceteris Paribus, Ethereum-based DeFi tokens averaged a 50 percent drawdown since the start of September, but have since rebounded by 35 percent.
Of these tokens, Yearn.Finance, Aave (LEND), and Loopring (LRC), have been the best performers, whereas Curve, Meta, and Sushi have been the worth performers – all declining by over 50 percent.
“DeFi tokens averaged 50% drawdown to start September. Have now rebounded 35% since but still down ~30% from Sept 1. LRC up, YFI & LEND down <10% since Sept 1. CRV, MTA, SUSHI down >50% since Sept 1.”
Analyst: DeFi sector likely to finish September on a high note
As CryptoSlate reported yesterday, one fund manager who has long been a DeFi advocate and investor is now noting that the bull trend for these Ethereum-based tokens is likely to resume in the near-term.
“I hope you bought the dip. September’s going to be one helluva month. We got Sushiswap vs Uniswap, Swerve vs Curve. LEND also getting listed on FTX.”
Assuming that Bitcoin and Ethereum are able to remain stable above their key support levels – as they have been for the past few days – it may just be a matter of time before they see significantly further upside.
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