Ethereum leads the rise, BTC breaks through 10,000, and together they suck blood from DeFi. Is the altcoin dead?

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Author: Zhao Yutao

Editor: Wu Talks about Blockchain

On the 26th, a big positive line appeared, and thousands of troops came to meet. Ethereum led the rise, BTC broke through 10,000, and the bigwigs and the media began to shout that the bull market was coming, and they did not forget to add a question mark.

The stock market is booming this month, with the trillion-dollar Ant Group going public. But the cryptocurrency market is quiet, with even Grayscale, which has been buying and buying, stopping its hoarding of cryptocurrencies.

Ethereum is the leader of this round of surge, breaking through the high point before the currency crash at the beginning of the year, setting a new high this year. On the 26th, BTC also broke through the 10,000 yuan mark. The top eight mainstream currencies by market value are all in the green.

The bull market is a mixed bag, and everything goes up, but DeFi suddenly stalled. According to OKEx and AICoin data, DeFi leader Link is in the red, and 6 of the top 9 DeFi market capitalizations are in the red, indicating that the mainstream is sucking blood from small currencies.

From the perspective of funds, no special funds have entered the cryptocurrency market. As for China's funds, the bull market is still in the stock market. Many cryptocurrency traders have started to speculate in stocks, and the trillion-dollar giant Ant Financial has also been listed. It is expected that the stock market will not start to bearish until August due to the reduction of the government's monetary easing.

Why is Ethereum the leader in the market?

The explanations are always simple, but they are also hindsight, such as "Vittarius expressed concerns on July 22 that high transaction fees would undermine network security." "There is already a test network in 1559." "Ethereum 2.0 will be released soon."

Analysts analyzed that "once Ethereum switches to POS, there will be a large amount of locked positions, which is the essential logic of the rise", "volume will be enlarged, the price of the currency will accelerate, short-term positions can be reduced, and long-term positions can be ignored."

According to the entanglement wheel: Ethereum forms a daily central axis, breaks through the central axis and does not return to the central axis, forming the third type of buying point. Of course, it will rise after buying. Bitcoin is still in the central axis, and no buying point has appeared. It is easy to be pulled back to the central axis if it rises.

Can the market be predicted? Experts can do it to a certain extent. The Chaos Theory only operates when the buy and sell points appear. On the daily level, Ethereum has just passed the third buy point, and the sell point has not come. Bitcoin's buy and sell points have not appeared. Waiting is the best operation.

Ethereum has a buy and sell point at the 30-minute level. By comparing the MACD column area of ​​trend 1 and trend 2, we can find that the upward force is weakening, that is, divergence. The first type of selling point at the 30-minute level has just passed.

Similarly, the 30-minute K-line has formed the center 2 and broken through, waiting for the completion of trend 3. When the corresponding MACD column changes from long to short, it is a selling point. If the trend 3 callback does not return to the center 2, it is a buying point.

Why mainstream currencies are sucking blood from DeFi

The trend is obvious, but what is the reason? First, this round of DeFi craze was triggered by COMP’s lending, or mining, and its arbitrage component is far higher than its actual application value; and the subsequent series of DeFi hot spots, such as AMPL, are essentially more like a Ponzi scheme game.

The result of short-term arbitrage is a game of passing the buck. Once the market sentiment declines, the holders will immediately cash out at the high point. Recently, public opinion has been advocating the opposition between Ethereum and DeFi. It can be seen that while Ethereum is leading the rise, DeFi is falling overall, which to a certain extent also confirms this sentiment. In addition, it also highlights that the cryptocurrency market does not have enough new funds and new users entering. A popular DeFi project may have only a few hundred users.

But are copycats dead? Far from it. First, the market, investors, and media all need a hot spot, unless the next hot spot replaces it. Second, the user base and capital base are still small, so there is a lot of room for growth.