Just a few days ago, many were ready to bet on a real takeoff for Ethereum. The resistance at $ 500, however, proved to be a major obstacle and a 30% drop over the last 48 hours of weekly trading made it clear how to ETH the near future could turn out to be very different from what we imagined. In fact, it would be his own ballast link with decentralized finance. Whose bubble seems to have now burst.
The bursting of the DeFi bubble
More than one observer had predicted it, but now for the DeFi the time for reckoning seems to have come. Just think of Year Finance, a token that had amazed with its seemingly unhindered growth.
After peaking at just below the $ 40 mark, YFN retraced below $ 20. Imitated by other cryptocurrencies related to decentralized finance, starting with Sushi Swap, which left almost 70% of its value on the ground. A collapse due in particular to the news on transfer of the tokens held by its administrator, Chef Nomi.
Ethereum, the driving force was running out
If it is true that the DeFi bubble now seems to have burst, penalizing the creation of Vitalik Butherin due to its link with the sector, it should also be emphasized that according to many analysts a retracement of Ethereum was now in the order of things. For example, just read a report by Santiment to better understand what was now maturing.
The company's analysts, in fact, recalled how the ETH exchange portfolios had now reached their maximum during the last semester. A position from which a fall was easily imaginable. To which one needs to be added significant decrease in the activity of daily active addresses and a reduction in network growth.
The growing correlation with Bitcoin
However, there is another factor that should be taken into consideration by those who plan to invest in Ethereum in the near future. We are talking about the growing correlation with the Bitcoin, highlighted by experts over the past few weeks. Of which, in fact, ETH has followed the fall over the last few hours.
According to analysts, a lot will now depend on what happens to the cryptocurrency queen. In case the BTC bulls do not intervene quickly, even for Ethereum there could be a further decline.
The Bitcoin boom would favor Ethereum
However, the now evident correlation between the two tokens gives Ethereum supporters hope. There are not a few analysts who continue to look confidently at BTC. By emphasizing the notable similarities with what happened in the previous ones halving. When, after an interlocutory phase, the creation of Satoshi Nakamoto gave rise to a rally capable of dragging the entire sector.
If this were to happen again on this occasion, the first to benefit should therefore be Ethereum. Precisely for this reason there is a lot of curiosity about what could happen in the coming weeks. During which, however, DeFi could be back in vogue precisely in the wake of a clarification in the sector and the emergence of truly valid projects, to the detriment of purely speculative ones.