Bull Rally Restarting: DeFi Blue Chips Giddy with Massive Uptrend
Ever since this past weekend, when Bitcoin took a dive to about $14,500, the leading cryptocurrency has taken to relax around $15,000.
With Bitcoin calming down, altcoins are the ones popping. Ethereum is keeping above $445, and although top altcoins are in the green, they are not the ones leading the market.
2020 has been all about Decentralized Finance, and this time it is no different. As a matter of fact, after enjoying a rally in August and topping out in September, recording severe losses, looks like DeFi coins are back for another round.
While the likes of Maker, Loopring, HOT, Sushi, Melon Protocol, Terra, UMA, Wrapped nexus, Bancor, and Compound are up less than 5%, they made record gains in the past week, albeit of mediocre levels.
CoTrader, Balancer, Mainframe, Curve, Augur, bZx Network, and 0x are popping up nicely today, all up over 10%. This DeFi rally, however, is all about the blue chips.
Friendly reminder all bluechips are not created equal.
— Hsaka (@HsakaTrades) November 10, 2020
But not all Blue chips are equal, and it is Aave, which is in the lead.
Currently trading at $63, Aave is up a whopping over 140% in just the last five days. It is basically a paradise for scalpers — short-term traders that execute dozens, in some cases hundreds of times, trades per day.
These gains also have heavy negative funding on Aave futures, which means shorts are paying the longs to keep the price of the perpetual swap contracts in line with the underlying asset.
tradfi participants love the narrative from the dot com boom and bust of waiting for the bottom, and then going allin blue chips like AMZN
own projects you believe in long-term bc that is the only thing which will give you conviction to hold thru dips and not sell spikes$AAVE
— Su Zhu (@zhusu) November 8, 2020
These gains came soon after Aave made the transition from its LEND token to Aavenomics. Before the rebranding as LEND, Aave was pumping hard, and afterward, as AAVE, it is pumping just as hard. Quant trader Qiao Wang said,
“Aave's token migration and ticker change from LEND to AAVE is the one of the most ingenious price discovery tactics in the history of DeFi.”
“Although the liquidity has deteriorated quite a bit. Doesn't take a lot of money to move the market by 10%.”
This $AAVE rally is literally a new paradigm.
— Qiao Wang (@QwQiao) November 10, 2020
Aave is currently the 5th largest project in the DeFi sector as per its $1.18 billion of total value locked in it, down from $1.67 billion on August 30, as per DeFi Pulse. Overall, the TVL has reached a new record of $12.75 billion.
“YFI & Aave volatility is a distraction to nuke your potential gains from riding out the trend instead of scalping,” noted trader Hsaka.
YFI is another project which is popping hard, about 90% this past week while trading around $17,800. Recently, YearnFinance joined hands with Hegic to introduce Options.
A very similar action can be seen in SNX, pushing for $5. This DeFi token has jumped 20% today and 85% in the last 7 days.
“The bull market is restarting,” said Wang, adding, “Largely depends on BTC/ETH of course. But I'm long, and a buyer of dips.”