ETH and the Defi space did not stand during the crypto market fall.
The favorable situation in the DeFi market, which still prevailed until 3 September, was replaced by a sharp fall. The falling range of coins balances from 30% to 45% within 4 days. Despite the fact that the agiotage at DeFi has reached its peak and Ethereum remains the main platform for project activities, ETH fall wasn’t an exception in the crypto market. After falling by 30% from 2 September, the Ethereum price shows that investors are in a hurry to get rid of the coin, forgetting about the DeFi projects for a while. A clear confirmation of our words is the trading volume, which during the previous 7 days is higher than during the active coin growth since July 2020.
In addition to volume, abnormally large candles are important. The last fall where such candles were found was in March 2020.
The range $370-400 came under the control of sellers. What’s next?
In the previous articles, we mentioned the importance of $370-400 range. Sellers have repeatedly tested and tried to take control of it. Fixing the Ethereum price below $370 over the weekend reduced the probability of continued growth with the final target $800. We are talking here about short-term perspective. Globally, the Ethereum market is still growing. There will be a serious danger in case sellers manage to fix below the range $250-270.
As we can see in the chart, buyers have been trying to cross this barrier for 4 months. Therefore, we expect to see a serious resistance from buyers in this range, which will be supported by increased volumes. The range $250-270 – is a chance for buyers to continue their trend, buying the entire offer of sellers.
ETH dominance in the crypto market.
If we pay attention to the ETH dominance chart in the crypto market, there is a noticeable struggle for the mark 12.45%.
It is the third time ETH is trying to maintain its influence in the crypto market, but the situation does not look in its favor.
The crypto market fall this time showed us that investors continue to act in a proven way and buy USDT and other stable coins, getting rid of volatile coins. This information is confirmed by the USDT dominance chart, whose dominance has almost doubled since 1 September.
Impact of trend change on the DeFi market.
Continuation of the down trend in the crypto market may slow down the DeFi projects development due to excessive volatility and fear of investors. In addition, a new wave of the Defi space growth requires a platform created for this ecosystem. Of course, the gas price increase during the intensive load on the Ethereum platform has a positive effect on the platform and ETH coin. And for DeFi this fact slows down progress.
According to experts, even ETH 2.0 will not be able to solve this problem. It was stated by industry representatives at Cointelegraph China DeFi Marathon. First of all, this update was not designed for the agiotage that has occurred around decentralized finance projects. By increasing power and speed, Ethereum 2.0 does not reduce the gas price. Will investors be interested in fast, but just as expensive transactions? We think the answer is obvious.
Charts courtesy of Trading View