93% of the top-250 cryptocurrencies dropped amid falling hype around DeFi

The decline in asset values leads traders to believe that the trend has turned towards a bear market. However, experts emphasize that the correction is just part of a broader trend.

Over the past week, 72% of assets from the top 250 largest cryptocurrencies have lost in value – in a monthly period, their share is 93%. Market data provider CoinMetrics writes about this in its weekly report. Analysts explain the current situation by a decrease in excitement around the decentralized finance (DeFi) sector.

Over the past several months, the value of tokens for DeFi projects, including Yearn.Finance, Compound, Synthetix, and Chainlink, have literally skyrocketed. The boom in the DeFi sector, with most Ethereum-based applications, has driven the ETH quotation from $100 in March to $470 in August.

Ethereum price. Source: CoinMarketCap

However, the hype around DeFi began to fade and this certainly influenced the overall market conditions. Ethereum has been trading in the range of $ 320-380 for the last 14 days, and the tokens of most DeFi projects have lost in price from 15% to 85%. For example, the bZx Network token fell by 85%, Curve by 78%, Swerve by 76%, Ren by 57%, Balancer 53%, Synthetix by 34% and Aave by 29%.

For a more accurate assessment of market sentiment, CoinMetrics suggests using a 7-day moving average chart, which is based on the highs and lows set by cryptoassets. The chart shows that most of the assets have set new lows. This shows that the market is following a bearish trend, but the strength of this trend is inferior to the market crash in March.

Curve reflecting the predominance of assets that have set lows. Source: CoinMetrics

The decline in asset values has led traders to believe that the trend has reversed towards a bear market. However, some experts, such as analysts at DeFiWorld, point out that the correction is part of a broader uptrend.

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