With the market capitalization of altcoins falling more than 20% during the week, one thing was for sure: panic selling. The bigger the landfill, the more panic and, in turn, the more pain in the market. Well this time it was no different and while Bitcoin and Ethereum hodlers seemed to be sitting down, some altcoins, especially DeFi tokens, saw huge sell-offs.
Nonetheless, Uniswap, Maker (MKR) and AAVE saw a mixed trend from COMP and Enjin.
A recent article pointed out how tokens associated with the DEXes and DeFi platforms, in general, have been able to outperform the currency and smart contract category. So while the m0arket seemed to be more optimistic on DeFi, which ones fared better than others?
Fear and panic take over
Panic sellers and market pain were clearly evident during this market turnaround and some DeFi tokens held up better than others due to the presence of stronger hands. A recent Santiment report, in fact, delved into the “panic detectors” for DeFi tokens and ranked the coins based on the average panic level of holders during the recent crash.
A look at exchange entries and network profit / loss (NPL) of different alts helps to better assess investor intent. The exchange entries highlight the number of tokens that were moved from non-exchange wallets to exchange wallets, suggesting the intention of the holders to sell. On the other hand, NPL calculates the average profit or loss of all currencies that change direction on a daily basis.
In particular, Uniswap saw minimal ‘panic’ even though entries were high. The previous UNI low attracted higher entry spikes, while the Network Profit Loss narrowed somewhat, showing some potential losses related to UNI transactions.
In hindsight, it is notable that over the past two days, Uniswap’s Total Locked Value (TVL) saw a jump of more than 10%, from around $ 5.6 billion to $ 6.2 billion, marking a recovery in shape. of V from his recent downfall.
Maker also had some strong hands in the market, as a single spike in forex inflows was seen during the turnaround. Furthermore, while AAVE and COMP posted a medium to low “panic” sell, the Enjin coin appeared to be the hardest hit. He saw three strong inlet spikes and significant loss drops across the landfill.
How do these coins look now?
Even though all of these aforementioned coins saw near double-digit weekly losses, on the back of Bitcoin’s rally, some picked up the pace. In fact, each of them posted significant daily gains before Bitcoin corrected again based on the FUD associated with China.
However, it is worth noting that before that happened, Enjin was at the bottom of the highest daily earnings, despite also having high entries.
So why this strange trend?
It is interesting to investigate why these altcoins made sellers react differently. External factors have played a key role in the rally for altcoins. Aside from the general increase in Market Cap / TVL that highlighted higher HODLing performance from market participants, external news of integrations appeared to boost some of these currencies.
In particular, at the time of writing, developments like MakerDAO announcing the integration of Gelato Network’s G-UNI Uniswap V3 token as collateral within their protocol put both MKR and UNI in a better social position.
Furthermore, the rapid and brief recovery in the price of the Enjin coin could be partly attributed to the NFT mania. In fact, the slowdown in the NFT craze coupled with the market dump could partly explain the huge panic sell Enjin saw.
This is a machine translation of our English version.