DeFi hype ebbs away through September

The DeFi boom witnessed between March and August is slowly declining, but it’s not the only thing going down

The receding hype around DeFi has negatively impacted coins resulting in price drops for 93% of the top 250 coins this month. The token prices of many DeFi protocols including Chainlink, Synthetix, Compound and Yearn Finance have seen an upswing these past few months. Consequently, this has led to talks that bull season has arrived.

ETH’s prices moved from $100 in March to $470 in August as a result of the DeFi euphoria on Ethereum.

A study into the market, however, reveals that hype has been petering out in the past few weeks implying a bearish cycle in the market. This can be seen in the price of ETH that has been swinging around $350 in the last two weeks.

A report by CoinMetrics shows that 72% of the leading 250 crypto coins have seen price dips week after week. The figure rises to a staggering 93% when a month over month analysis is carried out. A review of the DeFi chart by Messari in the month of September points out that most DeFi tokens corrected within the range of 15% and 85%.

Admittedly, the pullback is worrying most investors as they deliberate on whether the positive run has to come to an end or not. Even so, trend reversals are not an unpopular occurrence in bull markets. The bull market of 2017, for instance, had several price retracements.

Early that year, Bitcoin reached $1,180, a level that set off a huge sell-off, and crypto dipped by almost 40%. Still,that didn’t prevent the coin from moving to an all-time high of around $20,000 later on in the same year.

DeFiWorld, in this week’s release, labeled the corrections as a normal occurrence that is part of a much bigger trend. The newsletter drew comparisons to a similar occurrence from 2016. Part of the newsletter read, “We move in bubbles and 4-year cycles. While everyone is just thinking about what happens today, this week, or this month, you should zoom out and reflect where we are really heading. The long term trend is clear: It’s upwards”.

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