After several months in the NFT space, investors believe the DeFi is ripe for the next bull run. This is seen as the Total Value Locked across all DeFi platforms stands at almost $230 billion.
The crypto market has been weak since the start of the year, and this weakness spans from the token price to Defi Features like staking; but after seeing signs of both uptrends and downtrends during the last days of March, bitcoin’s run to the $40,000 mark has made the overall market sentiment change for the better. Both on centralized trading platforms, Redot.com and on decentralized platforms, there was no difference.
To explain the sentiment change, we take a look at the fear and greed index. Roughly a month ago, the market was extremely fearful. In the penultimate week in March, the sentiment improved a bit, but fear had the final say. The last week in March, the tick changed, and sentiments have pointed to greed ever since.
How has the market fared since 30days ago?
Subtly, the market has been recovering and posting gains before the last week in March, but sentiments were tilted towards it being a bull trap. Almost every DeFi protocol posted double-figure gains. Indeed, the words of popular business investor Warren Buffett come to mind; “be greedy when everyone is fearful, and fearful when everyone is greedy.”
Over the last thirty days, the biggest gainer has been THORchain (RUNE). It has posted gains just a few decimals short of 200%. 42% of this gain has come in the last seven days. Aave, the popular crypto lending platform, has also seen its token price increase by 53% in the last 30 days. Its 7day price change is 43.9%. Its competitor, and another popular DeFi platform, Compound, took its market cap to 189million. A 32% increase from a month ago. The trend went on and on across almost every Defi Project. The only two exceptions are FRAX, which had insignificant price changes, and AMP, which reduced by 6.4%.
Although these tokens have increased significantly, this rally has done little to recoup the losses most of them have accrued over time.
The TVL of the DeFi market is just less than 30 million off its all-time high of $256 billion. Several explanations have been given for this sudden surge in the TVL, but the only factual ones are that there has been an increase in the number of new protocols coming up in the last few months, which has also influenced the number of unique wallets available. As of the end of March, there are 4.5 million unique wallets available across all DeFi protocols.
The NFT mania
Ethereum has been an advantage to the cryptocurrency space. Smart contracts, DApps, and NFTs, are a few DeFi features introduced by the Altcoin market leader.
While the general market saw a downtrend, one particular area didn’t cringe a bit. It is the NFT market. In the same vein, another aspect of the market has yet to recover from the dip in the activity level on decentralized exchanges.
There Isn’t much enthusiasm amongst investors on swapping tokens. And although the first line of thought would suggest investors were staying on cash, data gotten from Dune analytics suggest otherwise. The funds were dispersed into other areas of DeFi, especially into Non-fungible tokens. That trend with NFTs is reversing as the TVL on Decentralized platforms is increasing. Let’s look at it below.
Talking about the NFT mania, the average price of an NFT was at an all-time high of $6,900 in January. There was a large influx of people into it, both with new projects and intending to buy and flip. Records on the daily sales also show jaw-dropping figures. When the rave was at its highest, the daily sales were around $160 million in January. Although the Russia-Ukraine war played a part in the flow of money, as this figure reduced by 30% during that period, its current daily sales of $26 million are just a fraction of the January highs.
It has been a great month for decentralized applications. OpenSea, LooksRare, and Uniswap have all ranked as the top-performing DApp by revenue over recent weeks, with Uniswap, Convex Finance, and PancakeSwap coming in third, fourth, and fifth place (despite Convex Finance being newly released).
After a dismal start to the year, the DeFi sector has seen TVL rise as investors return to a bullish crypto market. This is in line with the overall market trend, as Bitcoin and other major cryptocurrencies have also seen significant price increases in recent weeks. If you are looking for a centralized exchange to buy crypto, we recommend visiting redot.com. At Redot, they offer a user-friendly platform with competitive rates and 24/7 customer support. We hope that you will join us on our journey to building a better blockchain ecosystem.