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DeFi coins have not seen a significant price shift in the last few weeks. In the aforementioned time frame, for example, Uniswap, Marker, and PancakeSwap rallied by only 10%, 8%, and 2.3 percent, respectively. However, tokens such as AAVE and YFI managed to gain slightly more [17 percent each], indicating their strength.
However, it remains to be seen whether or not these two tokens will be able to continue their respective rallies.
The market has been quite favorable to traders advocating the price-drop narrative and the long-short liquidation data supported the aforementioned claim. Over the past 12 hours, $270k worth of YFI long contracts were liquidated when compared to the mere $56k worth of short contracts.
With AAVE, too, $851k in lengthy contracts were forcibly closed, compared to only $129k in short contracts. At the time of writing, the funding rate for both coins was negative on all major exchanges, exacerbating the gloomy feeling.
Furthermore, the OI data revealed another unfavourable tendency. Despite a recent increase in the number of existing derivative contracts, they were still well below their pre-set standards. According to the accompanying figure, YFI’s OI peaked at $137.2 million in May of this year, but its current value [$54.08 million] is less than half of that. AAVE’s OI too, for that matter, has to bridge a gap of close to $90 million to reach its previous peak.
On-chain metrics for each of these tokens remained inadequate. To begin, less than one-fourth of the addresses that were active during the first few months of the year, for both YFI and AAVE, were active at the time of publication. The decreasing involvement, on the whole, highlights the precarious nature of their respective blockchain’s operation.
Further, the balance on exchanges have been gradually increasing. In fact, they’ve been depicting contrasting trends when compared to their previous rallies. A day back, for instance, more than 16.4k AAVE tokens were sent to exchanges, outlining the fact that participants were gradually cashing out.
Well, it is quite obvious that the rallies of both these DeFi tokens lack momentum. Ergo, without the same re-entering their respective markets, traders shouldn’t expect any unreasonable pump. The next few days would indeed, test the resilience of these two tokens.