Wrap Market: DeFi Token Yearn.Finance Pops 76% as Bitcoin, Ether Makes Double-Digit Gains

Cryptocurrencies opened the week on a high, a reversal from a market dive on the weekend.

  • Yearn.Finance (YFI) is trading around $ 50,951 at 9 p.m. UTC (4 p.m. ET). 76% jump in last 24 hours.
  • Ether (ETH) trading around $ 2,668 at 9:00 p.m. UTC (4:00 p.m. ET). In the green 34% in the last 24 hours.
  • 24 Hour Ether Range: $ 1,970 – $ 2,668 (CoinDesk 20)
  • Bitcoin (BTC) is trading around $ 39,801 at 9:00 p.m. UTC (4:00 p.m. ET). Gain 19% in the last 24 hours.
  • 24-hour range of Bitcoin: $ 33,141 – $ 39,801 (CoinDesk 20)

DeFi tokens explode

Yearn.finance (purple) and uniswap (yellow) performance so far in 2021.
Source: TradingView

The decentralized finance, or DeFi, sector of the cryptocurrency market made major performance jumps on Monday. The Yearn.Finance loan protocol pledge is up over 76% at time of publication. Additionally, UNI, the pledge of the first decentralized exchange by volume, Uniswap, has climbed 54% at time of publication.

According to charting software TradingView, so far in 2021, both yearn and uniswap have made triple-digit percentage gains, but market volatility has actually undermined some of their hefty returns. For example, in early May, Uniswap rose over 700% before a sharp drop, then rebounded with Monday’s crypto bull market.

“DeFi tokens, like most altcoins, have a lower market capitalization, have less liquidity and therefore have higher volatility,” said Brian Mosoff, managing director of investment firm Ether Capital. “The past week was marked by a steep decline, with these types of assets hit harder than blue chip cryptos, such as bitcoin and ether. But while things seem to be rebounding, the decline in liquidity is leading to a faster rise in prices. “

Record DEX volume in May

Decentralized exchange volumes since January 2019.
Source: Dune analysis

Trading volume figures for Ethereum-based decentralized exchanges hit record highs in May, with total transactions well over $ 100 billion, according to data aggregator Dune Analytics. Uniswap is leading the way with a whopping volume of $ 61 billion this month.

Juicy opportunities in the crypto market this month have also led to trading volumes on centralized exchanges, with the largest amount of bitcoin changing hands on these sites last week. Large-scale capital inflows continue unabated and, if appropriate, are now able to take advantage of these slightly lower spot prices before all weak hands are shaken and we solidify a floor for that volatility.

John Willock, CEO of crypto custodian provider Tritum, says that many new entrants during this bull cycle are pouring into the market which is causing record volumes across the board.

“Large-scale capital inflows continue unabated and, if anything, are now able to take advantage of these slightly lower spot prices before all weak hands are shaken and we solidify a floor for this volatility, ”Willock told CoinDesk.

Increased volatility of ether

Hourly Ether Price Chart on Bitstamp since May 21.
Source: TradingView

The second largest cryptocurrency by market cap, Ether, was trading around $ 2,668 at 9:00 p.m. UTC (4:00 p.m. ET), gaining 34% in the previous 24 hours. The asset is well above the 10-hour moving average as well as the 50-day average, a bullish signal for market technicians.

As bitcoin’s 30-day volatility continues to rise, up to over 88% as of Sunday’s data close, the ether is showing even more jerks. With a volatility metric of over 150% over 30 days, this is the ether where traders are looking to generate significant returns of its rising and falling nature lately.

Bitcoin (black) and ether (blue) volatility last month.
Source: CoinDesk research

“We’ve had a few bumps in the road over the last few days and the fixes are healthy,” said Willock of Tritum. “Much of the recent volatility can be attributed to overexploited leveraged speculators who were liquidated and caused a cascade trigger of declines for many other participants who were on the margin in some capacity, whether on the futures or spot markets. “

Read more: Ray Dalio: “ I have Bitcoin ”

Bitcoin jumps, leverage costs stabilize

Bitcoin hourly price chart on Bitstamp since May 21.
Source: TradingView

Bitcoin, the world’s largest cryptocurrency by market cap, rose 19% on Monday at the time of publication. BTC was above the 10-hour and 50-day moving average, a bullish signal for market technicians.

BTC rose from $ 33,141 24 hours ago to $ 38,669 at 12:45 UTC (8:45 am ET), a 16.6% increase during that time based on data from CoinDesk 20. Bitcoin slipped, then rebounded to $ 39,801 at time of publication.

Exchange Bitcoin market funding between major sites.
Source: Distort

As crypto turned mega-bullish on Monday, funding rates to rise in the bitcoin market, known as perpetual swaps, are still close to zero. This suggests that the recent spot market pop has not been the result of traders borrowing cryptocurrencies for leverage for a long time – yet.

“The market recently collapsed into a ‘W’ type shape with the first leg going as low as $ 30,000,” said Elie Le Rest, an executive at crypto-quantitative firm ExoAlpha. “This ‘W’ bottom has allowed the market to rebound with a deleveraged state to build more sustainable growth.”

Read more: Bitcoin and Ether bounce back after disastrous week for the crypto market

Other markets

Digital assets on CoinDesk 20 are all green on Monday. Notable Winners at 9:00 p.m. UTC (4:00 p.m. ET):

Read more: Fed Brainard Breaks Down CBDC Policy Considerations

  • Oil rose 3.2%. Price per barrel of West Texas Intermediate crude: $ 65.94.
  • Gold was in the green 0.15% and at $ 1,883 at the time of publication.
  • Silver wins, up 0.85% and changes hands at $ 27.77.
  • The yield on 10-year US Treasuries climbed Monday to 1.601 and into the red 1.1%.

CoinDesk 20: the assets that matter most to the market


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