Balancer and Aave lead double-digit DeFi rally
After months of falling prices, buyers and sellers of Bitcoin appear to have reached a final standoff around the 2017 all-time high of $19K.
Bitcoin has been shuffling along in this area for five weeks now, pushing market volatility to its lowest in almost two years at levels similar to fiat currencies like the British pound. This relative stability, which comes amidst stubborn inflation, a stuttering global economy, and political turmoil in the UK, has led analysts at the Bank of America to suggest that Bitcoin could be casting aside its correlation with stocks and becoming a “relative safe haven” alongside gold.
Meanwhile, the altcoin market has seen mixed performance across different sectors. DeFi tokens have surged, with the likes of Aave and Balancer making double-digit percentage gains on a raft of positive news, while gaming and metaverse tokens have suffered. Gaming platform Axie Infinity is one of the worst performers with around 20% losses.
This Week’s Highlights
– Balancer and Aave lead double-digit DeFi rally
– Bitcoin may be a safe haven again
Balancer and Aave lead double-digit DeFi rally
While Ethereum and Bitcoin drifted sideways last week, Aave and Balancer both leapt more than 10% higher amidst a broader DeFi resurgence.
The positive price action came on bullish headlines: Uniswap Labs, the creator of the largest decentralized exchange, announced a $165 million series B raise, and Aave released technical details about its upcoming stablecoin, GHO.
DeFi tokens could also be benefiting from positive news relating to the whole sector. Development platform Alchemy has released a report suggesting that Web3 developers are “more active than ever” amid the crypto winter, and Citigroup has published research showing that decentralized exchanges have grown faster than centralized exchanges over the past two years.
Bitcoin may be a safe haven again
New research from the Bank of America suggests that Bitcoin could be shedding its correlation with the stock market and living up to the name of ‘digital gold’.
Analysts at the bank reviewed Bitcoin’s correlation with gold, the S&P 500, and the Nasdaq 100, and found a weakening correlation with stocks, and a rapidly rising correlation with gold.
According to the analysts, this indicates that investors may be viewing Bitcoin “as a relative safe haven” amidst continued macro uncertainty.
Week ahead
After more than five weeks of drifting sideways, tension is ratcheting up as investors wait for Bitcoin to make a decisive move away from the $19K level.
In the week ahead, such volatility could be catalyzed by the stock market, as the world’s largest tech companies — including Apple, Amazon and Microsoft — all report their third quarter earnings.
In addition, investors will be watching closely as the UK selects yet another new prime minister, and third quarter US GDP data is released on Thursday.