“The crypto market has been engulfed in a sea of red this week, with most DeFi blue chips recording double digit losses over the past 7 days.”
DeFi market cap declined 25%
In particular, according to the data provided by the resource, the market capitalization posted a 25% decline yesterday. Furthermore, the resource has reported through a blog post this fall was accompanied by a 30% drop in the trading volumes of DeFi tokens.
Notably, the most affected DeFi tokens are Sushi (SUSHI), Uniswap (UNI), and Yearn Finance (YFI) after suffering weekly losses of 51%, 38%, and 31%, respectively. While many have already predicted the end of the DeFi experiment, Santiment claims these declines may be related to "whale accumulation" around several DeFi assets, including Synthetix (SNX).
Has the DeFi bubble burst?
With such high double-digit losses, one might easily conclude that the DeFi bubble has burst and a huge number of these tokens might just disappear into oblivion.
Read also: DeFi Search Surges in China as Exchanges Lose Liquidity
Nevertheless, crypto analyst Andrew Kang believes that the DeFi market is in the initial stages of a market cycle. This stage is marked by a first market sell-off and a subsequent bear trap. The following tweet and accompanying chart of the DeFi market cycle show Kang's analysis of the DeFi market.
Where are we in the DeFi market?— Andrew Kang (@Rewkang) September 23, 2020
We're definitely not at the 2018 stage of the market where we see a long bear market
Probably somewhere between First Sell Off and Bear Trap
Some analysis below. https://t.co/XHnvoLYS2D
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