Metaverse tokens are beginning to cool down while DeFi systems sign up consistent inflows which pressed the market’s TVL to a new all-time high.
Sentiment in the cryptocurrency market is back increasing onNov 29 as the current dip down right into the “extreme fear” area on the Crypto Fear as well as Greed Index somewhat enhanced after Bitcoin (BTC) recuperated over the $57,000 assistance, raising the index higher right into the ” concern” zone.
Despite the overall “fear” and “extreme fear” sentiments that have been dominating the market since the index began to decrease on Nov. 16, several sub-sectors of the cryptocurrency market including Metaverse-related projects and gaming protocols have seen breakouts to new all-time highs.
The rapid gains seen in these projects has led to some concern that the Metaverse and gaming sectors could see a significant pullback in the short term if traders take profits and await more sustainable price levels, leading many to speculate on which sector of the market will be the next to see bullish momentum and price gains.
A deeper dive into the available data shows that the decentralized finance (DeFi) sector of the market has been steadily gaining momentum over the past several months as the total value locked in DeFi climbed to a new all-time high of $276.92 billion on Nov. 9 and currently sits at $265.74 billion.
The surge in TVL comes as new protocols continue to launch on Ethereum (ETH) compatible networks such as Fantom and layer-two solutions like Arbitrum that offer users the ability to conduct transactions in a lower fee environment.
Related: Ethereum layer-two TVL reaches all-time high
DEX activity picks up
Another sign that activity in DeFi is on the rise has been the uptick in the trading volume on decentralized exchanges (DEX) such as Uniswap and SushiSwap, which have slowly been seeing an increase in activity since the market bottomed in mid-July.
As seen in the chart above, the volume traded on the top DEXs is now consistently back at levels similar to what was seen during the bull market in the first half of 2021.
One of the most notable changes has been the addition of activity from dYdX, a decentralized layer-two perpetuals and futures exchange that surprised early adopters back in September when it airdropped its new governance token to users who had previously engaged with the protocol.
Since its launch, dYdX has become the go-to option for decentralized options trading the crypto market and at one time saw its trading activity surpass the spot trading activity on the top U.S.-based cryptocurrency exchange Coinbase.
One final piece of evidence that shows that activity in DeFi is on the rise along with the underlying sentiment in where the market is headed is found in the borrowed volume on the top lending platforms, which is now near an all-time high of $35 billion.
This suggests that crypto hodlers are securing their tokens as security to obtain lendings that can be propounded additional usage in crypto as well as DeFi associated task, as well as recommends that numerous are anticipating an extension of the booming market as the environment prepares to liquidate 2021 as well as obtain 2022 off to a warm begin.
The total cryptocurrency market cap currently stands at $2.63 trillion as well as Bitcoin’s supremacy price is 42.1%.
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