- Bitcoin has been consolidating throughout the past few days while altcoins continue losing value
- This trend has been well-defined throughout the past few weeks, showing that investors and traders alike are all currently focused on the benchmark cryptocurrency
- Although many analysts expect there to be some sort of capital rotation event out of BTC and into altcoins at some point, it’s unclear when this may take place
- DeFi assets have been hit the hardest by this weakness and may dive by another 50%+ unless Bitcoin goes parabolic in the near-term
Bitcoin’s recent uptrend has sucked all the oxygen out of the market, sending many altcoins reeling lower. Its uptrend has proven to be particularly bearish for the DeFi sector, which has continued seeing a relentless decline over the past few days and weeks.
This sector’s weakness is showing few signs of letting up anytime soon, and one analyst is now noting that it could soon see an intense 50%+ selloff.
He notes that this will take place if Bitcoin shows any signs of weakness in the near-term. Conversely, BTC rallying higher could create a slight tailwind that allows them to maintain their USD value.
Bitcoin Continues Climbing as Altcoins Stall
At the time of writing, Bitcoin is trading up marginally at its current price of $13,830. This is around the price at which it has been trading throughout the past couple of days.
This level has marked a strong resistance level in the past, as this is where BTC’s rally peaked during the summer of 2019 uptrend.
Unless bulls can shatter this level and push the crypto towards $14,000, there’s a strong chance that it will face a consolidation phase here.
Analyst: DeFi Could Collapse Further if BTC Doesn’t Rally
While sharing his thoughts on where the DeFi sector might trend based on Bitcoin, one analyst said that a failure for BTC to continue rallying here could cause high-risk DeFi assets to collapse by 50% or more.
“Assuming BTC doesn’t moon anytime soon, a -50% nuke is more likely than a +50% from here for DeFi IMO. After that we can begin a 2017-style bull market for the quality DeFi assets.”
It is important to note that while many top DeFi projects’ fundamental strength remains unchanged, prices are already down 70%+ across the board.
This may make it somewhat unrealistic to forecast a 50%+ decline from here without any immense market-wide weakness.
Featured image from Unsplash. BTCUSD pricing data from TradingView.SIGN UP FOR LIGHTCHAIN 2025 - BUY NOW