The ongoing altcoin season is being dominated by Ethereum, dominated to the extent that based on its market capitalization, ETH owns 15.5% of the cryptocurrency market. However, while challenging Ethereum’s dominance, top altcoins from the DeFi space and the NFT marketplace have rallied and offered high returns, redirecting investment flows.
Though known for their short-term ROIs, DeFi’s increased TVL and trade volume have strengthened the comeback from the dip over a week ago. DeFi’s dominance is likely to increase with contributions from CRV, REN, LINK, LUNA, and AAVE.
DeFi Unique Users || Source: Dune Analytics
Based on the above chart, the number of DeFi users is now above 2 million. Among projects that contributed to this growth over the past 3 years, there are a few with short-term gains. Projects like REN, LINK, and LUNA have offered double and triple-digit gains in 90 days, with high trade volume and volatility across spot exchanges. Based on data from Messari.io, REN, LINK, and LUNA offered 48%, 60%, and 999% in 90-day returns, respectively.
LINK’s volatility vs price || Source: Lunarcrush
Based on the above volatility v. price chart, LINK’s volatility has dropped in response to the increasing price. The concentration by large HODLers could be behind LINK’s price rally. DeFi projects with relatively high long-term ROIs, like CRV with YTD ROI of 383.98% and AAVE with YTD of 384%, are becoming part of HODLers’ portfolio for over 90 days as well.
Projects with high long-term ROI have relatively strong on-chain fundamentals, trade volume, though volatility may be low when compared to the short-term.
This DeFi comeback is marked by less popular DeFi projects and while top DeFi tokens like THETA, CHZ, ENJ, FLOW, MANA are still consolidating, based on BTC and ETH’s price, it is clear that the bull season may not have ended yet.
There is room for a DeFi comeback with projects like CRV, REN, LINK, LUNA, AAVE. Retail traders are expecting a price rally and that is the key reason why accumulating is best when top DeFi tokens are in the buy zone. Beyond accumulation, timely profit booking is driving DeFi’s demand. The price has been directly proportional to the increasing number of unique users, whales, and retail traders and these projects are likely to continue boosting DeFi’s TVL.
