Reading: Ethereum Just Shot Up $250 But Don’t Bet on That Resistance Breaking

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Altcoin Price

DeFi Carnage: Ethereum Coins Aave, Yearn.finance, Uniswap, Synthetix Dive 20%

Nick Chong

Nick Chong | Sep 22, 2020 | 01:00

Altcoin Price

DeFi Carnage: Ethereum Coins Aave, Yearn.finance, Uniswap, Synthetix Dive 20%

Nick Chong

Nick Chong | Sep 22, 2020 | 01:00


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  • Top Ethereum-based altcoins are plunging as the price of Bitcoin fails to react positively to the $11,000 resistance.
  • BTC is down 4% in the past 24 hours while Ethereum has shed 8%.
  • Most top altcoins on Ethereum, such as Yearn.finance and Aave’s LEND, are down over 20% in the past 24 hours.
  • This move was not unexpected, especially as there are some fundamental trends set to supress DeFi in the medium term.

Top Ethereum-Based Coins Plunge Amid Bitcoin Pullback

Ethereum-based Aave’s LEND, Yearn.finance (YFI), Uniswap’s UNI, and Synthetix Network Token are among the top DeFi tokens that have retraced by over 20% in the past 24 hours amid Bitcoin weakness. 

This move was predicted by a crypto trader multiple days ago.

As reported by Bitcoinist previously, one prominent Bitcoin analyst commented that if Ethereum slipped under $250, DeFi altcoins could drop over 20% in a day:

“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.”

Ethereum

Chart of ETH's price action over the past few weeks with analyis by crypto trader Flood (@ThinkingUSD on Twitter). Chart from TradingView.com

What’s Causing the Weakness in DeFi?

The weakness in DeFi is being caused by a number of bearish fundamental trends that are likely to suppress this Ethereum-centric sector in the medium term.

One crypto analyst known as “Theta Seek” outlined these trends in a recent extensive Twitter thread. Some of these trends are as follows:

  • DeFi is difficult to many not acclimated with cryptocurrencies or with financial technology. There are even reports of prominent users with large holdings losing their funds due to bugs and misuse of contracts.
  • Capital entering Ethereum and its DeFi ecosystem may be slowing down.
  • There is a “money grab culture” that could take away from the space’s relevancy and legitimacy.
  • A regulatory crackdown could take place in the Ethereum DeFi space. Just last week, a number of regulators in the U.S. noted that they have taken notice of the space. Should there be any large bug or hacks, these regulators will likely move to protect their constituents.

Others analysts thinking that Ethereum DeFi could be in a medium-term bear trend includes Qiao Wang, a prominent analyst and trader. Wang said a number of weeks ago that the exit by SushiSwap’s founder may have put a bitter taste in the mouths of DeFi investors in the near term.

Photo by Jack B on Unsplash
Price tags: ethusd, ethbtc, lendusd, lendbtc, yfiusd, yfibtc, uniusd, unibtc
Charts from TradingView.com
DeFi Carnage: Ethereum Coins Aave, Yearn.finance, Uniswap, Synthetix Dive 20%

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