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DeFi falls when Bitcoin rises higher

November 3, 2020

The co-founder of cryptocurrency data aggregator Markets Science and Twitter user ‘Bitdealer’ shared a graph showing the negative correlations between the top 11 DeFi tokens and BTC over the past 45 days ending November 1st;; AAVE shows a neutral correlation and UNI shows confluence when it is less than 0.1.

Seven out of 13 DeFi tokens also found negative correlations with Ethereum (ETH)even though Ethereum powers much of the DeFi ecosystem.

Since many decentralized finance tokens (DeFi) struggled when Bitcoin (BTC) rose in price this week, Analysts have found a longer negative correlation between DeFi and BTC tokens.

45-day correlation between BTC price development and the 13 best DeFi tokens: Bitdealer
DeFi falls when Bitcoin rises higher
DeFi falls when Bitcoin rises higher

But still, The sector found its speculative plateau in late August, with Binance’s DEFI Composite Index falling 64%from $ 1,100 in early September to less than $ 400 at press time.

TokenSet’s DeFi Pulse Index (DPI) has also lost more than half of its value since its launch in mid-September at $ 130.. The DPI tokens last changed hands for just $ 61.55.

Meanwhile, The price of Bitcoin has increased by more than a third in the last monthAt the end of October, the global payment giant PayPal rose to enter the cryptocurrency sector.

Google’s payment engineer, Tyler reynoldsbelieves bullish moves in Bitcoin markets are driving DeFi away from hedge capital“Big DeFi Players”, including Three Arrows Capital and Qiao Wang, recently released “a narrative of hard sales towards BTC”. Reynolds It is estimated that up to $ 50 million has left the DeFi market, easing buying pressure in the markets.

Cryptocurrency trader Flood made a similar comment on the Coinist Podcast.I said it didn’t “have as much engagement as I would have liked on that bull move, and I think that’s a representation of the whole market.”

Trading activity on decentralized exchanges (DEXs) also appears to have reversedMonthly DEX volume declined from around $ 26.3 billion in September to around $ 19.4 billion last month.

Only a handful of DEXs have a significant share of the sector volume, and Uniswap and Curve account for 75% of decentralized trading as of September.. Uniswap’s volume over the past three months is 45% of the total DEX volume as of November 2019.

DEX monthly volume: Dune Analytics