defi market analysis DeFi in 2020, what the next?

[Whited35 15285]

DeFi utilizes blockchain technology by replacing all central intermediaries like brokerages, middlemen, exchanges, and banks. There is no known inventor of DeFi but in the essence, most of the DeFi platforms are based on the Ethereum blockchain network that is invented by Vitalik Buterin. The first DeFi platform was MakerDAO and currently, it has managed to be the biggest DeFi platform with a total locked $2.34B worth of tokens.MakerDAO was created to give financial freedom to everyone then the craze for the DeFi platform started along with it and in 2020, DeFi craze is seen at the peak. Currently, the total value locked in DeFi is $12.89B equivalent currencies which are itself incredible at this experimental phase.

 

Image by Alethio Defi Report - 2020

 

It is proof to detect how average investors are trusting the smart contracts of DeFi platforms to send the crypto. According to DeFi Pulse, Total market cap dominance from the biggest DeFi platform Maker is seen at 18.14%.

Image by DeFi Pulse

Top ten DeFi platforms according to the total value locked in their smart contract
In the following list, MakerDAO is seen at the top position while other WBTC and Uniswap are seen at the second and third positions. Uniswap has made an incredible comeback to be at third position after releasing governance token UNI. 

 

Image by DeFi Pulse

 

By the end of Q1 of 2020, global industries have experienced a tough time and DeFi sector was not an exception to remain safe from the downtrend. After noticing so many incidents, the crypto community is starting to believe when the stock market crashed, the crypto market is also crashed. On March 12, 2020 (“Black Thursday”), the whole crypto market was crashed and DeFi sector was also badly affected at that time. 

 

Image by DeFi Pulse

ETH Locked In DeFi
Overall, the total ETH locked in the DeFi platform is at increasing rates if we locate the data since early 2019. Especially, DeFi platforms Maker and Compound are dominating other platforms in case of total ETH locked in their smart contracts. January 30, 2020, was the brightest day for DeFi sector. On that day, the crypto community has seen the highest number of ETH locked on the platform that was 3,178,695 million ETH. Check the data below. 

Image by Alethio Defi Report - 2020

Top DeFi tokens by market cap
Chainlink(LINK) token is seen at the top spot. Uniswap (UNI) token is at 5th position with a good performance in the cryptocurrency markets. 

For a reference, follow a market analysis for DeFi token Uniswap(UNI).

 

Image by Coinmarketcap

UNI/USD Price Analysis
I have taken a chart for UNI/USD market analysis for the Gemini exchange. Price strength for pair UNI/USD is looking good. So let's follow the chart. 

In the above chart, it is clearly seen, SMA-10 days has made two golden crosses against SMA-20 and SMA-50 days. Recently, a golden cross made by SMA-10days against SNA-50 days indicates the market is more likely to follow the bullish trend.MA cross indicators are taken here, and they are also directing a slightly bullish market for UNI. 

 

 

Again, let's see the several ups and downs for the price of UNI in the market. You can clearly see massive overbought and oversold states of UNI over the past months. Currently, UNI has faced an overbought market to put its price around 3.56 USD and the market's sentiment can still follow a bullish trend despite a slightly bearish market is seen today. 

Relative Volatility Index (TVI)
RVI value is seen 41.52 that is under 50 and volatility is to the downside i.e.less volatile market of UNI token on the exchange. 

 

Relative Strength Indicator (RSI)
RSI value is seen at 58.45 which means UNI is still following the bullish market. RSI value is not seen 70 or above 70 so it may not be considered for a trend reversal now.

 

Conclusion:-DeFi is still at the experimental phase but the total value locked in the smart contracts of DeFi platforms indicates the growing popularities and demands of DeFi. Investors are trusting smart contracts instead of middlemen. Despite the several hacks of DeFi platforms, popular platforms like Uniswap, MakerDAO, and Compound are getting more interest from the crypto community. Performances of DeFi tokens like Chainlink(LINK), Uniswap (UNI), and Yearn Finance(YFI) are looking stunning. Maybe, you have also known, the highest price of YFI token this year was USD 43,873.82 that was more than double of all-time high BTC price. So these all things are showing the green signs for DeFi sectors in the future. 

 

[Calvinpriva 17296]

40 minutes ago, Whited35 said:

Relative Volatility Index (TVI)
RVI value is seen 41.52 that is under 50 and volatility is to the downside i.e.less volatile market of UNI token on the exchange. 

 

Relative Strength Indicator (RSI)
RSI value is seen at 58.45 which means UNI is still following the bullish market. RSI value is not seen 70 or above 70 so it may not be considered for a trend reversal now.

Hmm! Brother, well explained. You have explained these DeFI giants in-depth, but as you know am not good at these coins, so I just need to understand a few things. What is the reason behind YFI dumping from $43.8K to its current price? Also, it seems like UNI has decreased very quickly from its highest price to the current price, is this normal for these two currencies or there is a reason behind it? Do you think their price will recover?

[Whited35 15285]

@Calvinpriva Excellent questions. Let me answer one by one for your satisfaction. 

13 hours ago, Calvinpriva said:

What is the reason behind YFI dumping from $43.8K to its current price?

YFI was completely valueless governance tokens before. Its developers have made an announcement regarding its usage but when DeFi wave hit, its price was seen over the peak but later, DeFi craze started to follow downtrend and price of YFI was massively decreased. Chjeck this topic https://cryptotalk.org/topic/110126-“completely-valueless”-the-governance-token-yfi-token-has-boomed/

13 hours ago, Calvinpriva said:

Also, it seems like UNI has decreased very quickly from its highest price to the current price, is this normal for these two currencies or there is a reason behind it? Do you think their price will recover?

The same thing happened for UNI. So many investors are looking like to trust the good DeFi platforms so in this scenario, we can just expect an upsurge for price of UNI in the cryptocurrency markets. 

[Smallingcane012 344]

The only god know what is next because one can not always determine the feature on his or her own so with that is only god can say that one in my view as a member of this great forum.

[Abdulrahman3 1252]

It is not uncommon for clients to trust Divi platforms, currencies and transactions, because it always tries to offer the best prices and the lowest commissions in the market, and any company or project that tries to develop itself continuously will succeed.

[Chakomakasi0123 52]

Dedi in 2020 the next is only God know the next no one can predict the future or what will happen in the future because what you predict may be not true that is why is not good to predict.

[ltaa02 52]

I think It is not uncommon for the client to trust Divi's platforms, currencies and transactions, because it always tries to offer the best price and the lowest commission in the market.

[Whited35 15285]

On 1/18/2021 at 10:27 AM, Abdulrahman3 said:

It is not uncommon for clients to trust Divi platforms, currencies and transactions, because it always tries to offer the best prices and the lowest commissions in the market, and any company or project that tries to develop itself continuously will succeed.

What do you mean? Generally, DeFi platforms have the fees at the global standards and generally they are higher. Additionally, the core intention of this topic is to make an organic prediction of DeFi markets in the cryptocurrency sphere, 

Probably you have not found the way what to write in this thread, I am thinking so. Try to be specific here please.