Welcome to a new DeFi Report, where we take a look at how the world of Decentralized Finance reacted to the movements of the cryptocurrency market in the past seven days. Let’s begin:
As we can see, the fragile state of the cryptocurrency market is replicating itself in the DeFi sector. As BTC struggles to break the $10,000 mark, and the overall market is being dragged down each time it falls, the TVL in contracts and the value of the BTC-backed digital tokens handled by platforms like WBTC is also decreased.
The cause of the sudden drops are still not clear. Most analysts are seeing it as the result of holders selling near the $10,000 for fear of the next drop, while others say it’s an indication of a period of low volatility that may pave the way for big moves in the near future. This scenario could be greatly beneficial for DeFi, since a period of big positive climbs could inject a lot of balance into the futures market. We will see how this situation plays out in the following weeks.