- Whales were starting to accumulate in the bear market as prices fell.
- Investments across the NFT sector, liquid staking, and lending rose.
The crypto sector’s optimism has been challenged by recent events. SEC’s lawsuits against Binance [BNB] and Coinbase [COIN], Curve Finance [CRV] getting exploited, and Bitcoin’s [BTC] price falling below $30,000 turned many market participants skeptical about what’s to come.
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Whales buy the dip
These factors have caused a price correction of many tokens across various sectors in the crypto market. However, whales’ behavior indicated that many large investors in the crypto space have seen this as an opportunity to invest across different crypto verticals.
According to Santiment’s recent data, whales showcased interest in tokens pertaining to NFTs, Lending, and Liquid Staking.
At press time, several networks have witnessed numerous transactions exceeding $10 million in value. As altcoins experienced volatility and a decline in market capitalization, prominent investors demonstrated their power with cryptocurrencies like Aave [AAVE], ApeCoin [APE], Lido [LDO].
Source: Santiment
Where APE falls
Interest showcased by whales in APE stands out the most among other altcoins. APE’s price declined significantly over the last month, owing to the overall lack of interest in the NFT sector showcased by traders over the past quarter.
In the last few months, the NFT sector has experienced a massive decline in activity, resulting in low volume and sales across exchanges. Based on Dune Analytics’ data, the number of trades occurring across exchanges declined massively over the last month.
Source: Dune Analytics
NFTs associated with APE and Yuga Labs primarily faced the brunt of falling interest in the NFT market. According to DappRadar’s data, BAYC [Bored Ape Yacht Club], MAYC [Mutant Ape Yacht Club], and CryptoPunks suffered severely over the last month.
The volume of trades for BAYC fell by 28.91%, whereas for MAYC, there was a 40.28% decline observed. CryptoPunks was affected the most and observed a decline in volume of 45.46% in the last 30 days.
Source: Dapp Radar
Only time will tell whether the whales’ bets in the NFT sector and APE will pay off. At press time APE was trading at $1.801. Despite the decline in APE’s price, the number of APE token holders grew over the last month.
If this trend continues, the probability of a reversal for APE’s price could rise.
Source: Santiment
DeFi’ng the odds
Apart from the NFT sector, the whales made some hopeful bets in the DeFi space as well. One of the major investments made by whales was in AAVE. This came as a shock, as the token fell victim to the FUD surrounding the Curve exploit.
The FUD was due to Curve founder Michael Egorov’s holdings. During the event of the exploit, Michael held a $70 million USDT loan using CRV as Aave v2 collateral.
In the event of CRV dropping below 65% of its value, it will be at risk of liquidation. Due to these factors, the price of AAVE fell massively. However, whale behavior indicates that many investors are hopeful about AAVE’s future.
At press time, AAVE was trading at $63.55. The velocity with which the token was being traded had spiked over the last few days, despite the declining price. The growing velocity indicated that the frequency with which AAVE was being traded had surged.
Source: Santiment
In contrast to its price action, the Aave protocol’s performance was relatively positive. According to Token Terminal’s data, the daily active users on the protocol grew by 48.2% over the last week.
Subsequently, the revenue generated by the protocol grew by 51.5% during the same period.
Source: token terminal
Lido takes the lead
Another DeFi token that the whales took an interest in was LDO. At press time, LDO was exchanging hands at $1.85. Over the last few days, the network growth of LDO has declined materially.
The decline in network growth suggested that new addresses were losing interest in the DeFi token.
Source: Santiment
A contributing factor for the whales’ decision making would be the recent performance of the Lido protocol.
Realistic or not, here’s AAVE’s market cap in BTC’s terms
Despite the fluctuations witnessed within the DeFi market, Lido’s Total Value Locked (TVL) has managed to increase. This growth can be attributed to the influx of fresh deposits in both Ethereum [ETH] and Solana [SOL], collectively amounting to an impressive $14.94 billion.
Notably, Lido has secured top position in terms of net new ETH staking deposits over the last seven days, amassing a substantial 116.9k ETH in deposits. This momentum highlights Lido’s resilience and strong performance within the staking ecosystem.
? Lido Analytics: July 24 – July 31, 2023
– TVL up due to new ETH & SOL deposits – now $14.94b.
– Lido 1st in net new ETH staking deposits (7d: 116.9k ETH).
– Curve ETH/stETH LP reserves see outflow – now 107,107 ETH / 109,208 stETH (≈-24%).
– stETH/ETH rate stable at 0.9993. pic.twitter.com/1Wb4wAmPgz— Lido (@LidoFinance) August 1, 2023
