Research shows Bitcoin rally negatively impacted DeFi market
Data provided for the last 45 days by Science Markets co-founder Bitdealer shows consistent DeFi negative price action when compared to Bitcoin. The BTC rally has become a big threat to a DeFi recovery as the price of Bitcoin has moved higher in the short term, perhaps causing the DeFi market to plunge. This correlation is demonstrated by to two things: buyer demand offsetting heavy selling pressure and short sellers who are rushing to cover their positions, leading to BTC’s increase. Yearn.finance recovery seemed to be losing strength as drop might return below $10,000. Many other DeFi tokens are struggling to stage any kind of comeback, which adds isn't good for positive market psychology in the DeFi space.
Why it matters: There is no doubt that crypto investors are shifting into Bitcoin as the DeFi bubble of 2020 comes to an end. Bitcoin has attracted big names as investors this year, and also some nations are starting to buy the world's most valuable token as measured by market cap. There will likely be some winners in the DeFi space in the long-run, but it would appear that the broad-based appetite for new DeFi projects that likely began in late 2019 is over. The correlation that Bitdealer identified will probably continue, and may becomes more extreme as DeFi token holders realize that the party is over.
