Don't Confuse A General Market Dip With A Bubble
When you look at the altcoin market as a whole it becomes quite clear that all sectors within the altcoin space have been hit extremely hard in recent weeks. It is not only the DeFi space that has seen tremendous losses but even newcomers such as Polkadot have been decimated in a broad spectrum altcoin bloodbath. This has left many with the opinion that the DeFi bubble has indeed popped.
I may be wrong but I believe that solid DeFi projects will return back to their respective recent highs, sooner rather than later. My initial thoughts on this space prior to prices crashing was that there would be a second wave of DeFi frenzy that would focus on DeFi projects that have multiple use cases. Time will tell if this is an accurate prediction or not but either way, you cannot profit from something that you are not exposed to it.
The Space Is Still Very Active
Taking a look at DeFi pulse in the screenshot below, you will notice that the amount locked up in DeFi is still as high as it was prior to prices falling like lead.
If the value of assets has dropped but the amount locked into DeFi remains constant, it means that there are actually more assets locked up in DeFi post dump than back when prices were soaring. If prices continue to rise, you will see the value of DeFi liquidity reach new all time highs without an increase in liquidity being required.
Even though BTC has regained the upper hand against the alts in regards to dominance, alts are still performing really well considering. LINK is back up over $11 after being squashed at $7 and ATOM is up at $6 after being compressed all the way down at $3.70. The inverted head and shoulders pattern seems to be playing out as predicted in this recent post but we still need to see it push past $6.20!
Before you flip bearish, always remember that bull markets incorporate massive drops of up to 45%, only to reach new all time highs. It is a volatile ride up to the top and unfortunately there is no alternative route.
This is not investment advice. please do your own research before taking part in this market or any market.