The decentralized financial sector has made massive gains over the past week, with all ‘blue-chip’ tokens seeing explosive momentum as bulls flow back at full speed to the controversial fragment of the crypto market.
This rebound first started when DeFi was sweetheart Yearn.finance’s YFI token hit lows of USD 7,500 after which it gained tremendous momentum that skyrocketed to highs of USD 18,000.
It has since stabilized and is trying to place a high time frame close to this crucial level. If broken firmly and held above for an extended period of time, it can provide a foundation on which to grow, allowing it to reach new record highs.
Coupled with the price spikes many crypto tokens are seeing within the ecosystem, the yields of liquidity providers on decentralized trading platforms have also exploded.
This has justified the price movements of DeFi tokens and could create a tailwind to lift them higher.
A trader now notes that he expects DeFi’s crypto assets to go “stupid” in the short term as the rest of the market shows continued strength.
He believes the stability Bitcoin is currently seeing, and a massive Ethereum rally, will hatch this next move.
Crypto market stability helps DeFi rebound
The rebound seen everywhere DeFi Tokens seen recently when looking at the DeFi Perpetual Index on FTX, which tracks the value of a handful of the industry’s top projects.
This contract hit as low as $ 1,400 a few weeks ago and is currently trading at $ 2,160.
At its peak in late August, the DeFi Index peaked at $ 3,500. While it still has a long way to go before it reclaims these highs, the recent lows look like a long-term low.
Analyst: DeFi tokens may get higher soon
An analyst explained that he believes DeFi tokens are about to shoot higher in the near term, which will be incubated by Ethereum seeing a ‘stupid run’.
“At the moment there is broad market strength in Defi blue chips, ETH and Bitcoin. ETH looks like it wants to go on a stupid flight. Send this and SNX YFI RUNE AAVE UNI are all going crazy, to say the least, ”he said.
Image Courtesy of Cantering Clark.
Where Ethereum trends are next, will no doubt affect the wider DeFi market. Any sustained strength can cause smaller tokens to skyrocket.
Featured image from Unsplash. Pricing data from TradingView.