Crypto Bloodbath Spills to DeFi as TVL Nosedives

When the digital currency ecosystem records as much as a plunge below $1 trillion in combined market capitalization, the Decentralized Finance (DeFi) ecosystem can certainly not be spared.


While Bitcoin (BTC), the industry’s legacy coin, has skidded back to its lowest level since December 2020, the DeFi Total Value Locked (TVL) has also plunged in tandem, dropping to $83 billion at the time of writing.

For context, the DeFi TVL was pegged at around $114 billion, as reported by Blockchain.News back in May was a figure which was considered very low considering its prior leaps. 

The spill-over in the crypto ecosystem into the DeFi world is unprecedented, and it explains the growing lack of faith amongst both retail and institutional investors in the ability of the DeFi protocols and their underlying products to help print marginal profits. 

MakerDAO (MKR) still maintains its 9.67% dominance in the DeFi industry atop an $8.03 billion in Total Value Locked. Curve Finance (CRV), Aave (AAVE), and Lido Finance (LDO) trailed Maker in that order with respect to their relevance, but not without an encompassing minimum drop of 25% from all three protocols.

Bad But Not All is Worse

While the outlook of the DeFi ecosystem looks very bad, the trends are not completely worse for all of the protocols as some are maintaining a positive growth even amidst this encompassing uncertainty. 

Frax Finance (FRX) is amongst the protocols with a marginal growth per its TVL upshoot. With a daily change of 0.21% and a weekly change of 2.48%, it is evident that investors consider the protocol one of the most resilient for now. 

Solana-based AMM protocol, Atrix, Maple Finance, and Spool Protocol have also shown far more resilient growths on the weekly chart compared to the reality in the broader crypto ecosystem.

Image source: Shutterstock


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Despite Crypto Market Onslaught, These Altcoins Stayed Bullish

The past week saw a comprehensive and encompassing onslaught in the crypto market ecosystem as the combined market capitalization plunged to $1.56 trillion, the lowest level that has been recorded since February 24.


Investors are no longer oblivion of the fact that the continuous increase in interest rates by the US Federal Reserve is poised to channel funds out of the crypto ecosystem into the traditional market, and they are pricing in the cryptocurrencies based on this reality.

However, not all of the top altcoins saw a plunge in their value in the Week-to-Date (WTD) period. Here are three of the most resilient coins which printed good growth amid a sweeping bearish slump.

Tron (TRX)

Tron is the native cryptocurrency of the Tron blockchain protocol, and it is one of the most digital currencies being shilled by the popular investor, Justin Sun. The coin is changing hands at $0.08735, up 4.10% in the past 24 hours and by 28.98% in the trailing 7-day period. A new utility was added to the coin with the introduction of USDD, an algorithmic stablecoin that was floated by the Tron DAO Reserve.

Algorand (ALGO)

Algorand is one of the most versatile and scalable blockchain protocols around today. With a growth of 22.04% at the time of writing to $0.7334, it was obvious that investors saw the upside potential in the new role of the protocol as it was named the official blockchain partner of the FIFA world football governing body for the coming world cup competition. With its cheap price, investors are optimistic about a good uptrend in the near term.

Curve DAO Token (CRV)

The Curve DAO Token is the native token of the Curve platform for stablecoins that uses an automated market maker (AMM) to manage liquidity. The CRV is arguably one of the most resilient tokens to survive the past week’s onslaught as it is up 17.43% to $2.41 per token according to data from CoinMarketCap. The platform and the token are now considered one of the banner protocols in the Decentralized Finance (DeFi) world.

Image source: Shutterstock


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Avalanche correction risk rises after AVAX price soars 80% from January lows

Avalanche (AVAX) recovery extended into its third week, primarily in the wake of similar upside retracement across the top crypto assets.

On Thursday, AVAX’s price rallied by nearly 16% to reach $96.50, its best level since Jan. 14, 2022. The massive intraday move came as a part of a recovery that started Jan. 22, after the Avalanche token bottomed out near $53. As a result, AVAX’s net rebound came out to be more than 80%.

AVAX/USD daily price chart. Source: TradingView

Network growth offsets macroeconomic scare

Crypto markets have been whipsawed since the beginning of 2022 as investors assessed the U.S. Federal Reserve’s monetary tightening prospects. After reaching its record high above $150 in November 2021, AVAX lost as much as 65% of its value in what many have termed as “crypto winter.”

Similarly, top cryptocurrencies Bitcoin (BTC) and Ether (ETH) plunged by as much as 52% and 57% from their Nov. 2021 record highs. But they recovered almost half of their losses after bottoming out in late Jan. 2022, thus prompting other crypto assets — including AVAX — to undergo similar healing rallies.

AVAX price also rose as Avalanche—as a standalone blockchain project—reported massive network growth at 2021’s close.

That included a rise in the number of its daily active addresses to 70,000 per day in Q4 versus 10,000 per day in Q3 and a 714% rise in the total value locked (TVL), the fastest growth among its competitors within the Layer-1 and Layer-2 categories, after the arrival of leading Ethereum protocols, Aave and Curve, into its ecosystem.

Avalanche 2021 total value locked versus competitors. Source: TradingView

Interestingly, the Avalanche network grew in Q4 despite a drop in its net market valuation in the same period, suggesting AVAX merely reacted to turbulence in the crypto and, in turn, the global markets, led by the Fed’s so-called taper tantrums. 

But a report co-authored by Messari researchers Chase Devens and James Trautman hinted at higher AVAX adoption in the quarterly sessions ahead. It mentioned Avalanche Rush, a $180 million liquidity mining incentive program launched in August 2021, for its ability to attract more participants into the network.

Excerpts from the report:

“While Avalanche Rush may continue to serve as a catalyst for ecosystem growth and garner more project launches and partnerships, significant technological advancements are on the horizon for the teams developing the Avalanche core platform and are critical to the network’s ability to sustain further growth.”

AVAX technical outlook

AVAX’s recent upside move met with selloff near a multi-month descending trendline resistance this Tuesday.

Specifically, the resistance comes as a part of a falling channel. AVAX has been trending lower inside it since the beginning of its massive correction move in late November 2021. As a result, the Avalanche token’s probability of continuing downward inside the channel’s range—for now—appears higher.

AVAX/USD daily price chart featuring falling channel. Source: TradingView

An extended pullback upon testing the channel’s upper trendline as resistance may push AVAX toward the interim support level of $86.50. A further breakdown would have AVAX/USD eyeing $72 as its next target.

Related: VanEck launches its first multi-token cryptocurrency fund

Nevertheless, on the whole, AVAX’s bearish target on a pullback looks to be near the channel’s lower trendline —that is around $57.

Conversely, a decisive move above the channel’s upper trendline could have AVAX eye $104 as its next upside target, with an inclination to hit $135 on a further move upward. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.