Author: Qin Xiaofeng
The market is always caught off guard.
This round of rising starts from Ethereum. On the evening of November 4th, the Ethereum 2.0 deposit contract was officially launched, directly driving ETH to break through the $400 mark, and then Bitcoin also rebounded from $13,700. In the early morning of November 6, Bitcoin broke through US$15,000, reaching a maximum of US$15,985, a record high since February 2018; a 24-hour increase of more than 10% is not seen for a long time. In the next few days, Bitcoin has been trading sideways at a high around $15,000, and its bullish momentum has continued.
During Bitcoin’s rise and sideways, the old mainstream coins such as LTC, EOS, and BCH did not show much improvement; instead, a number of DeFi leading coins such as YFI and AAVE rebounded strongly and became a dazzling presence in the market.
The replacement of the old mainstream by the new mainstream is overwhelming.
(1) Many people who stepped in the air, wait for the callback
Paradoxically, unlike the previous crypto market breakthroughs, this time the enthusiasm of investors seems to have weakened a lot. Except for the breakthrough that night, everyone sent a dynamic celebration, and since then it has been much quieter.
Behind the reduction of enthusiasm is the helplessness of stepping into the air.
Before this round of breakthrough, it coincided with the U.S. election and the external market (US stocks, etc.) was turbulent. In addition, Bitcoin was also consolidating at a high level.
However, even short positions are “cut”. Due to the lower exchange rate of the U.S. dollar, crypto investors who converted into USDT for hedging still failed to escape the curse of shrinking assets. As follows:
(U.S. dollar and USDT exchange rate trends)
Now that BTC has made a strong breakthrough, investors who had short positions were afraid of chasing more, and there are still many wait-and-sees.
Will Bitcoin pull back?
Skew data shows that BTC futures holdings have also been rising recently, reaching $5.7 billion, becoming a new high; and the data of the past year also shows that after each new high, the price of BTC will fall sharply in the following.
Therefore, BTC is more likely to pull back. After all, more than 95% of UTXO bitcoins are currently profitable, and it is reasonable to call back and wash the market.
(Odaily Planet Daily Note: UTXO refers to the amount of bitcoins that have not been spent, and is only stored in the bitcoin wallet; “in a profitable state” means that the bitcoin price when UTXO is generated is lower than the current bitcoin price.)
(2) DeFi leaders are soaring
In this round of uplift, a very interesting phenomenon appeared: the DeFi sector rose sharply, but the old mainstream currencies such as BCH and LTC did not follow the rise.
Odaily Planet Daily statistics found that in the past week, among the top 15 old mainstream coins, LTC had the largest weekly increase, reaching 10.23%, while the remaining mainstream coins basically remained at around 5%; the old mainstream coins did not exceed 30%.
In contrast, the DeFi sector has rebounded rapidly. The DeFi index on FTX rose from 1400 to 2000 in the past week, an increase of more than 40%. Specific to the project, AAVE, YFI, and YFII led the gains, with weekly gains of 113%, 111%, and 72% respectively. There is a tendency to replace the old mainstream coins and become the new mainstream coins, as shown below:
However, it should be noted that although the DeFi sector has risen, it does not mean that the entire track will usher in its second spring. Liquid mining projects such as SUSHI, SALT, and YAM have not come back to life. In fact, only the leading DeFi projects have really recovered in this round of rebound.
DefiPulse data shows that the amount of locked positions on the chain rose again in the past week, from 10.9 billion U.S. dollars to 12.7 billion U.S. dollars, an increase of more than 16.5%; and most of them are contributed by leading DeFi projects such as Uniswap.
(3) What is the new story?
After the halving in May and the DeFi liquidity mining in the summer, the current hot spots in the crypto market are lacklustre. What is the next story that can inspire enthusiasm for the market?
Odaily Planet Daily believes that there are three points worth noting.
One is Ethereum. With the launch of Ethereum 2.0, related ecological projects will be exposed and can be focused on. In addition, since ETH2.0 is temporarily unavailable, the existing expansion plan on ETH1.0 is also expected to grow as a substitute.
The second is Polkadot ecology. As the work of Ethereum co-founder Gavin Wood, Polkadot is also one of the few projects that can compete with Ethereum. With that, the entire ecology will gradually increase, and you can pay attention to it in advance.
In addition, Dfinity, Filecoin and other “ace pigeons” are also recovering this year, returning to the public eye, and you can also pay attention to related actions.
Finally, I add that DeFi liquidity mining has basically come to an end, but DeFi can still focus on important directions for a long time, and new product models will largely come from it.
