The co-founder of crypto data aggregator Markets Science, Twitter user ‘Bitdealer’, shared a chart showing the negative correlations between 11 top DeFi tokens and BTC in the last 45 days to November 1, with AAVE showing a neutral correlation and UNI shows confluence if less than 0.1.
Seven of the 13 DeFi tokens were also found to have a negative correlation with Ethereum (ETH), despite Ethereum powering much of the DeFi ecosystem.
In late August, the sector found its speculative plateau with Binance DEFI Composite Index 64% crashed from $ 1,100 in early September to less than $ 400 at time of writing.
The DeFi Pulse Index from TokenSet (DPI) has also lost more than half of its value since its launch at $ 130 in mid-September. DPI tokens last traded for just $ 61.55.
Google payments engineer Tyler Reynolds Believes that the bullish action in the Bitcoin markets is taking speculative capital away from DeFi, noting that “major DeFi players,” including Three Arrows Capital and Qiao Wang, have recently “pushed a story of a hard spin in BTC. ” Reynolds estimates that up to $ 50 million has left the DeFi market, weakening the buy-side pressure in the markets.
Crypto trader Flood made a similar point in the Coinist Podcast, saying he didn’t have “as much exposure as I would have liked from this rise and I think that reflects the market as a whole.”
Only a handful of DEXs account for a significant share of the industry’s volume, with Uniswap and Curve accounting for 75% of decentralized trade in September. The Uniswap volume for the past three months equals 45% of the total DEX volume since November 2019.