The DeFi Market Massacre May Mean Bottom Is Close


  • DeFi market is going through hard times

  • Yet YTD ROI is still high for many DeFi tokens

  • Whales are still skeptical about token accumulation

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The collapse of the decentralized finance market by more than 25% in just one day can be a good sign for long-term investment, according to Santiment

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The market for decentralized finance (DeFi) is a financial service built on blockchain technology that offers users access to an open, efficient and … More carnage. Over the past 24 hours, the sector’s market capitalization has plummeted more than 25%. At the time of this writing, the farm token has lost the most in a day.As the use of cryptocurrencies grows, new types of tokens appear. They can represent value or something intangible like voices. Two … More YAM (-50.7%), YFI (-16.6%) and DMG (-14.3%).


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From a global perspective, things look even more dramatic. Of the top 100 DeFi tokens, more than 90 assets suffer colossal losses on a weekly scale. Of those who managed to gain weight despite the massacre were RSV (+ 36.1%), AUC (+ 29.6%) and WGRT (+ 12.9%).


However, Dino Ibisbegovic, head of content and SEO at blockchain analytics portal Santiment, believes negative numbers and pessimistic sentiment surrounding DeFi on Twitter could mean potential benefits for investors..

Pessimism is good

Citing two-year sentiment indicators around Bitcoin, Santiment concluded that a positive attitude towards the asset almost always foreshadowed an imminent collapse in the price of cryptocurrency..


Several peaks in bitcoin price in 2019, as well as in February, April and August 2020 coincided with very positive average sentiment and market euphoria, followed by market declines.

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Ibisbegovic notes that market euphoria is not a good signal for long-term investment in a cryptocurrency asset:

“Over the past two years, most Bitcoin rallies have actually stemmed from very bearish sentiment as crowd expectations were low and the coin was generally considered overvalued by most market observers.”.

The DeFi Market Massacre May Mean Bottom Is Close

Most of the DeFi market assets are in bearish territory, according to Santiment Social Data. Some of them, like SUSHI and YFI, have been in this zone since mid-September, and KNC, REN and SNX tokens even later..

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The whales swim sideways

Notably, the overwhelming sentiment for many DeFi assets remained negative even before the crash in late September.

Santiment argues that if the DeFi market continues to fall towards bearish sentiment over the medium term, this could bode well for a potential recovery in the above assets. At the same time, as the on-chain metrics show, cryptocurrency whales are not yet very interested in DeFi..


In the event that the first signals for the accumulation of tokens appear, the community should still take a closer look at the assets due to the potential price recovery, the company added..

Despite the weekly crash, the 45 tracked DeFi tokens have grown by 745% since the beginning of 2020, up from 240% in the last 90 days. The short-term picture shows that over the past 30 days, the total loss of these tokens is 8.5%.

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The DeFi Market Massacre May Mean Bottom Is Close
The DeFi Market Massacre May Mean Bottom Is Close
The DeFi Market Massacre May Mean Bottom Is Close

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