Data Pie: Multiple currencies plummeted by 90%. Is DeFi reaching the end or a new starting point?

DeFi has fallen sharply recently, with many falling 90% from their highs. Just like Bitcoin back then, it has also been labeled a "crash scam." The decline has stopped in the past few days. Is it time to reverse and rise, or will it continue to fall after a relay break?

Of course, the mainstream coins in DeFi did not fall so badly, with a drop of about 50%, which is not much. In the blockchain field, there are also high-purity drops of 99.9%. Bitcoin fell 16% and Ethereum fell 32%.

In the long run, Bitcoin has been through a decade of trials and tribulations, and large funds have begun to reserve it. Ethereum's ecosystem is prosperous and unique, and it is the foundation of DeFi. These two real estate projects have stable returns in the long run.

The mainstream of DeFi is exchanges and banks, which are also rigid demands in the traditional financial field and are at the top of the food chain. LINK oracle is the infrastructure of DeFi and can reflect the overall trend of DeFi.

The conclusion is: DeFi has good fundamentals, and the decline is also supported by technology. The price ratio reflects that funds are still paying close attention. Even if there is a further decline, the space is limited. Long-term price investment is not a big problem.

2 DeFi fundamentals

Fundamentals: DeFi has locked over 10 billion US dollars, with over 500,000 users. The transaction volume of Uniswap, one of the main applications, has exceeded that of the traditional old Coinbase. The number of infrastructure LINK addresses has also been increasing.

The fundamentals of DeFi have not changed, and value investment is not a big problem. One way to trade with less risk is to be a leader. As the Chan Theory says: "Investment should follow the big team." This is especially true for the leeks who have limited investigation and analysis capabilities.

The top 10 DeFi coins account for 80% of the market capitalization. The top 10 not only covers the market capitalization, but also covers the main forms of finance. Exchanges are equivalent to securities markets, and deposits and loans are equivalent to banks, accounting for 5 seats in total.

Synthetic assets, mirroring real-world stocks in the blockchain as trading targets, account for two seats. The remaining REN cross-chain privacy is suitable for dark web transactions, and YFI can be stored wherever the interest rate is high, expanding transactions and optimizing deposits and loans.

Oracles are the foundation of DeFi, providing price data to DeFi. Even Uniswap, which relies on function-based market making, has upgraded its oracle support. The characteristics of infrastructure are needed by everyone and account for the highest market value.

The DeFi leaders are basically all here, including the oracle leader, exchange leader, bank leader, cross-chain leader, and aggregated trading leader. NXM, the insurance leader ranked eleventh, will not be considered this time, and its real-world insurance is also weaker.

3 DeFi price comparison

The price ratio mainly depends on the inflow of funds. It has a certain stability and will return to a certain extent after deviation. Taking August 1 as the starting point, the mainstream DeFi currencies are analyzed.

Most of the mainstream DeFi currencies have a good correlation, after all, they are in the same sector. The white part is basically YFI and REN. These two currencies have attracted the attention of funds and have developed independent trends.

Common points: YFI is optimized in deposits and loans, and REN is optimized in privacy. I don’t know if the optimization based on a bunch of projects is the cause of independent market conditions. Perhaps it is a variant of the logic of selling shovels.

Judging from the data of the largest decline, it is basically around 50%. YFI, which has the largest increase, has a relatively small decline, while REN, which has the second largest increase, has the largest decline.

Judging from the results of the recent rebound, most products have returned to their August levels. YFI and REN have doubled compared to August, and these two projects have also seen the largest increases.

From the price index, YFI is far ahead and the most eye-catching. Although REN started fast, it fell the most and eventually became obscure. After all, YFI, which helps to make more money, is more valuable than REN, which does more illegal work. It is difficult for illegal production to expand.

4 DeFi Technical Analysis

LINK represents the big money in DeFi, and YFI represents the strongest force in DeFi at the current stage. The K-line trends of other currencies are highly correlated with LINK. Having a basket to hold eggs is actually enough, after all, they are all the same kind of basket.

It is right to pursue stable LINK. For risk-takers, YFI is the best choice. Whether it is a club or a construction site, it depends on it. Of course, it is still recommended to invest with idle money. If you don’t have good skills, don’t use leverage. Borrowing money off the market is better, at least it will not be targeted.

LINK K-line analysis

Judging from the LINK daily K-line: This round of decline was supported by the center and the six-month moving average, and was able to rebound. The rebound reached the center 2 formed by the decline, indicating that the strength of the rebound is still good and is expected to continue.

Future market: It is likely to consolidate around the center 2 for a period of time before choosing a direction. The K-line generally looks for the direction with the least resistance. There are not many locked-in orders upward, and it is likely to fluctuate upward. There is not much room to go down.

Operation: After all, it is a value coin with good fundamentals. There is a large central axis to support it. Although it is a bit of chasing highs if you enter directly, the probability of loss in the long run is not high. Those who pursue high returns can wait for the callback to enter at a low point.

Since other currencies do not have independent market conditions and operate in the same way as LINK, UNI may perform well due to its late listing and can be paid more attention to, after all, it is the leading platform coin of decentralized exchanges.

YFI K-line analysis

Judging from the YFI 4-hour (Binance time period, so the period is smaller) K-line: This round of decline also received support from the center and was able to rebound, and the strength of the rebound generally only reached the center of the second decline.

Future market conditions: There is a high probability that there will be a decline. After all, the previous increase was too large and too fast. From a fundamental perspective, it depends on others. After all, the income from liquidity mining is now more normal. Even if it is annualized, the number is small.

Operation: Long-term holding, deposits and loans will not always have such high profit margins, there is no need to take risks. In the short term, it is a popular currency after all, and the concept is not bad. It is still possible to wait for another drop and then rebound. (Author: Zhao Yutao Editor: Wu Shuo Blockchain)