The decentralized financial sector has seen massive gains over the past week, with all of the “blue chip” tokens seeing explosive momentum as bulls flood back into the competitive fragment of the crypto market at full speed.
That rebound first began when DeFi darling Yearn.finance’s YFI token hit lows of $ 7,500. At that point there was massive momentum that rocketed it towards highs of $ 18,000.
It has since stabilized, trying to reach a high timeframe close to this crucial level. If broken firmly and held on top for an extended period of time, it could create a base for growth that will allow it to hit new all-time highs.
Parallel to the price peaks that many crypto tokens observe in the ecosystem, the returns of the liquidity providers on decentralized trading platforms have also skyrocketed.
This has justified the price movements of DeFi tokens and could create tailwinds to lift them higher.
One trader now notes that he expects the DeFi crypto assets to go on a “stupid run” in the near future as the rest of the market continues to be strong.
He believes Bitcoin’s current stability and a massive Ethereum rally will fuel this next move.
Crypto market stability supports DeFi rebound
The recovery that has recently been seen in the larger DeFi tokens can be seen when looking at the DeFi Perpetual Index for FTX, which measures the value of a handful of the top projects within the sector.
This contract hit a low of $ 1,400 a few weeks ago and is currently trading at $ 2,160.
At its peak in late August, the DeFi index hit highs of $ 3,500. While there is still a long way to go to get back to that high, the recent lows look like a long-term low.
Analyst: DeFi tokens could skyrocket soon
One analyst stated that he believes DeFi tokens will be on the verge of shooting higher in the near future, which will be incubated by Ethereum if a “stupid run” takes place.
“There is currently broad market strength in Defi Blue Chips, ETH and Bitcoin. ETH looks like it wants to do a stupid run. Submit this and SNX YFI RUNE AAVE UNI.
Image courtesy Cantering Clark.
Where the next Ethereum trends will next affect the broader DeFi market. Any continued strength could skyrocket smaller tokens.
Featured image from Unsplash. Price data from TradingView.