Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The Crypto Market ends the week at a total market capitalization of $2,120 trillion. Bitcoin is up by nearly 4% in comparison with last Sunday. Ethereum lost 2% in value over the week. XRP is down by roughly 4% after a troublesome week. Most altcoins, except Avalanche, have traded in the red for most of the week. The DeFi sector gained almost $1.4 billion from the…
Decentralized finance (DeFi) has enjoyed a strengthened narrative in 2020. This is such that some DeFi tokens like Aave (LEND) have incurred more than a 1,000 percent increase while the price of Ethereum increased by 90 percent since the beginning of this year.
It appears that investors are developing more interest in this market sector. According to cryptocurrency derivatives analytics company Skew, Ethereum will enjoy this trend the most in the long-term. Skew noted that these DeFi tokens powered by Ether appear to have a “more sustainable” product and market fit than the ICOs of 2017.
Similarly, John Todaro of TradeBlock commented on the possible performance of Ethereum, noting that it would ultimately attain ‘escape velocity.’
“There’s a lot of excitement around new DeFi tokens. A reminder that most of that collateral locked up across those platforms is in Ethereum. As that outstanding Ether supply comes down and demand from DeFi platforms hits escape velocity, ETH will rally hard.”
Another factor influencing optimism around Ethereum is the forthcoming ETH 2.0 upgrade. As the preparation to move to a proof-of-stake (PoS) consensus algorithm continue, the dull performance of ETH has given the whales the opportunity to grow their positions. However, things may not eventually go as perceived, which is going to be unfortunate.
That is, caution is required when others are greedy. Ethereum’s social activity attained levels not recorded since May last year, despite the hype around DeFi and ETH 2.0. Its sentiment volume increased over 1.5 as investors grew overwhelmingly bullish about the future.
Nevertheless, this is not a good one when we consider its correlation with price over the previous year. There is tendency for the price of ETH to incur a remarkable decline every time Ether’s social sentiment is above 0. Therefore, as the current value is above 0, history may be about to be repeated which will lead the price of Ethereum to the downside.