The stagnating price campaign by Ethereum came about despite many positive developments within the ETH ecosystem. The growth of the DeFi sector has led to a multitude of statements about the fundamental strength of the cryptocurrency, but this has not yet resulted in a positive price action.
A data analyst is now declaring that he does not expect Ethereum to outperform the broader DeFi sector before the end of its upward cycle. He claims that new funds entering the room will feel like they are too late to achieve the parabolic upward trend seen by many of the smaller tokens and will instead choose to buy ETH. This buying pressure could fuel the next big upward trend.
Ethereum is facing a lackluster price move despite the parabolic growth in the DeFi sector
Over the past month, tokens related to the decentralized financial ecosystem have seen gains reminiscent of those of the aggregate crypto market in 2017.
Many tokens have experienced parabolic dynamics driven by the influx of new investors and users. Although driven in part by sheer hype and “fomo”, many protocols associated with these ERC-20 tokens are increasing in use.
According to DeFi Pulse data, the total value of the crypto assets now locked in the DeFi protocols is over $ 2 billion. That is almost four times the total value of the blocked tokens last March.
A popular data analyst, known alias Ceteris Paribus, said he expects Ethereum to surpass these tokens towards the end of the parabolic growth cycle.
“ETH WILL PROBABLY NOT OUTPERFORM UNTIL THE END OF THIS DEFI CYCLE. NOT B / C'S DEFI PROFITS WILL SHIFT TO ETH, BUT BECAUSE THE NEW MONEY WILL HAVE MISSED 10-50 TIMES THE RETURNS, YOU SEE THAT ETH STILL TENDS TO BE RELATIVELY FLAT, AND INSTEAD BUY ETH AS IT IS A SAFER AND EASIER RETURN. ”
How long can the DeFi tokens continue to rise before there is a withdrawal?
Ceteris Paribus added that while he does not expect these tokens to experience the same “exuberance” as in 2017, there is still room for growth.
“NO DEFI TOKEN HAS A (CURRENT) MARKET CAP> $ 1B. THE LAST XRP CYCLE WAS WORTH MORE THAN 1/10 OF A TRILLION. THERE WERE MORE THAN 40 COINS THAT REACHED> $ 1B. DON'T THINK WE'RE GOING TO EXPERIENCE THE SAME EXUBERANCE AS 2017, BUT YOU CAN'T PREDICT WHERE A TREND WILL END. ”
That being said, it could be some time before Ethereum is able to catch the tailwind created by assets within the decentralized financial ecosystem.