With BTC’s rejection of $14.000, a market-wide correction has begun and DeFi tokens have floundered
As Bitcoin starts to retreat from its highs in more than two years, blood is pouring out from altcoins, especially those related to DeFi tokens. Bitcoin price has dropped more than 5% since a weekend high of over $ 14,000, but that is nothing compared to losses registered elsewhere.
The crypto market is a sea of red this Tuesday morning with double-digit losses over the past 24 hours against many tokens. Price action does not go in a straight line, and pullbacks are a natural part of a market cycle. In fact, they are quite healthy, allowing them to accumulate and relax before moving on to the next leg.
DeFi tokens dump when the Bitcoin price
DeFi-related tokens had declined since the beginning of September when the DeFi bubble started deflating. The total value locked in this sector also decreased as farmers pulled out their liquidity to participate in the massive sell-off. From an all-time high of $ 12.5 billion, TVL has dropped to $ 11 billion, but it’s still relatively high compared to the plunging token price.
DeFi screener https://t.co/H2MWGitfGo
— Messari (@MessariCrypto) November 3, 2020
Some of the bigger names in DeFi, including Curve, Compound, SushiSwap, Aave, Synthetix, Yearn Finance, Balancer, Bancor, Loopring, and Uniswap, have incurred double-digit losses. The native token for all these protocols has dropped from 10% to 15% in the last 24 hours. Hegic is the only DeFi token to have seen a significant gain for the day, with Augur’s REP still only in green as markets anticipate warming ahead of the US election.
The 45-day correlation between price performance of BTC and 13 top DeFi tokens: Bitdealer
According to Coingecko, the total crypto market cap had dropped $ 15 billion since the same time yesterday. The drop brought it back below $ 400 billion once again as sell-offs intensified.
Ethereum has been hit hard with a 6% lost falling back below $ 375 despite getting closer to the launch of ETH 2.0, while Ripple’s XRP fell 4.5% to below $ 0.23. Bitcoin Cash, Chainlink, Bitcoin SV, Cardano, Tron, and Tezos lost around 10% on the day.
There are very few gainers apart from a handful of stablecoins trading slightly against their pegs at the moment. If BTC drops below $ 13,000, altcoins are likely to suffer more.
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