Tuesday’s crypto market plunge reverberates and it shows: leading DeFi tokens from AAVE to Uniswap (UNI) were hit even harder by Bitcoin’s price plunge than BTC itself.
Dramatic hours were experienced by the price curve of Bitcoin (BTC) the day before yesterday and in the negative maelstrom the leading currency dragged the overall market down with it. Hindsight reveals: the booming DeFi division, in the form of its blue chips like Chainlink (LINK) or Uniswap (UNI), was unable to counter the momentum as Bitcoin tumbled. By the time things settled down on Wednesday, BTC was down about 11 percent and Ethereum (ETH) was down as much as 15 percent. But those who had hoped that the steady growth in DeFi could decouple related altcoins from the trend were wrong.
- Uniswap (UNI) was down 15 percent and may also be in serious trouble with the U.S. Securities and Exchange Commission (SEC).
- Chainlink (LINK), the leading data service for DeFi, was down 16.4 percent.
- AAVE got off a little more lightly, down 12.5 percent.
- PancakeSwap (CAKE), a major competitor of Uniswap, fell 17.4 percent.
- Terra (LUNA as a DeFi blue chip with a focus on stablecoins was able to hold its ground comparatively well with “only” 8.3 percent minus.
Solana (SOL) can confirm status as star of the hour
The big outlier under these circumstances remained Solana (SOL), which many also classify as a DeFi token. Solana slipped temporarily into the red, but has already resumed its rapid uptrend. After the all-time high from the beginning of the week at SOL with 185 US dollars, Solana has currently even taken the psychologically important hurdle of 200 US dollars seemingly effortlessly and marks another impressive all-time high with 214 US dollars.
Conclusion: Good time to invest in DeFi Altcoins?
Analysis following the Bitcoin price plunge suggests that the red hours were triggered by speculative trades. A healthy market shakeout brought about by this is basically to be welcomed. Thus, there are definitely arguments for using the current situation to add DeFi Altcoins to one’s portfolio. One insight for you as an investor remains in any case: Even if Bitcoin and DeFi are theoretically two different pairs of shoes – the psychological effect of hefty price movements in BTC does not leave DeFi cold at all, but even tends to have a disproportionate impact.