Crypto markets flat but DeFi surges to all-time high

Updated: 27 Feb, 2021
3 mins read

Bitcoin and its brethren have been relatively inactive this weekend however decentralized finance (DeFi) markets have been on fire.

There has been very little activity on cryptocurrency markets this week with total capitalization hovering around the $265 billion level. A slight uptick during Monday’s Asian trading session has made a push a little higher, but most digital assets remain flat on the day.

Bitcoin has bounced off resistance at $9,400 several times over the past couple of days, while support has formed at around $9,250 as the world’s premier crypto asset trades in this tight range bound channel.

BTC price 1 hour chart – Tradingview.com

Volatility has dropped and analysts are getting concerned about the next big move, which it looking like it will be downwards.

BTC has returned to its resistance level at the time of writing and breath is being collectively held while it tests and tests again – a breakout is imminent.

Ethereum has made a little progress this weekend but that is largely due to big moves in decentralized finance markets. ETH, which serves as the foundation for DeFi, has regained $235 during the morning session.

There are only two other crypto tokens in the top twenty getting any gains at the moment, and they are Chainlink, which is up 3%, and Huobi Token which has made similar ground. The rest are immobile.

DeFi Markets Surging

The same cannot be said for DeFi which has hit an all-time high in terms of total value locked. According to Defipulse.com, decentralized lending and borrowing markets topped $1.5 billion in USD equivalent crypto collateral this weekend.

There is 3 million ETH locked into DeFi smart contracts, which represents 2.7% of the entire supply of Ethereum. The amount of BTC locked in also hit an all-time high at 6.8k late last week.

Chart – Defipulse.com

The Ethereum based financial ecosystem has been driven by the Compound platform and its token distribution which started last Monday. The protocol began issuing COMP tokens to platform participants who deposit crypto as collateral or take out loans.

Last week token prices surged to over a billion dollars in market value making it the first ever DeFi unicorn. That momentum continued over the weekend driving prices as high as $325, and propelling Compound to the top of the DeFi charts.

DeFi offers high interest rates on crypto deposits which currently beat any high street bank. Token rewards are an additional bonus, and they have boosted this new financial landscape to a new peak.

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Martin Young

Martin has been writing on cyber security and infotech for two decades. He has previous trading experience and has been covering the blockchain and crypto industry since 2017. He has previously contributed to Asia Times, Cointelegraph, NewsBTC, Bitcoinist, Cryptoinsider, Beincrypto, and Micky.