The trading optimistic note in the DeFi composite index market sharply ended, launching a new musical composition, more like hell rock. During the day, the index price fell by 30%, breaking the growth momentum from 5 November. Buyers struggled to fix above the critical range $650-700 to accelerate the growth trend.
However, all the buyers managed to do was break this range for a while. In fact, since 7 November, buyers have been constantly reducing the price movements range for correction. Though, in return they could not update the local highs just as aggressively:
That is why the key range of $650-700, which we wrote about in the previous article stopped buyers’ enthusiasm and prepared a good foothold for a sharp price correction. As you can see from the chart, the index price fell in a few hours at increased volumes and stopped at the growth channel bottom trend line.
The index price sharp fall was technically due to the stop orders of buyers, which actively began to work breaking the trend line of the formed wedge. The fundamental reason for the fall was Bitcoin, which fell by 15%, dragging the entire crypto market to the bottom.
Ethereum 2.0 launch
Today’s example clearly shows how important a favorable market environment is for the implementation of new projects or upgrades. If you take into account the launch of Ethereum 2.0, which fulfilled the main condition of the launch – the goal of 524,288 to launch the ETH 2.0 beacon chain.
High expectations of really important news for the DeFi space did not force investors to flow capital from Bitcoin and other coins into ETH.
Thus, being at a low start, the ETH price fell by 20% identical to the entire crypto market.
Of course, the upgrade will be successful and will have a positive impact on the market in the future. Looking at the growth chart of the Eth2 Deposit Contract balance, this confirms to us:
Although the crypto market continued correction after a grueling growth may temporarily delay all the benefits of this Ethereum update that the DeFi ecosystem will be able to experience.
DeFi composite index tokens behavior
The LFC token was added to the DeFi tokens that affect the DeFi composite index. It has 2.5% in the index weight. Analyzing the summary table, we see that the fall favorites were YFI, YFII, CRV, BZRX. This time, the UNI buyers showed themselves well. They usually allow the token price to move according to the chart with great volatility.
So far, buyers have kept a strong sale in the DeFi composite index market. The critical point for the growth trend continuation is the mark $550. Still, buyers have every chance to accumulate volumes for a new growth wave and the DeFi market recovery as a whole.