An overview of what is happening in the crypto markets, summarised daily by Crypto Finance AG Senior Trader Patrick Heusser in the market commentary.
Another Blood Bath.
The major cryptocurrencies are down between 30%-40%, and the smaller coins are down roughly 40%-60%. Liquidations mainly occurred in Ethereum (ETH). It was one of those rare days yesterday where we had (in USD terms) a higher amount of ETH liquidations than in any other currency. OI fell significantly in both ETH and Bitcoin (BTC).
DeFi-Sector had to take a hit
The DeFi sector was hit hard. It did not help the overall situation that the SushiSwap chef sold all the Dev-Sushis, and that ETH took one of the biggest hits of the major currencies. Pretty much every vegetable token on the planet had its fire sale moment over the weekend.
Some projects, e.g. Solana (SOL) and Serum (SRM) took a dive due to the potential future collaboration that was up for voting. It is difficult to judge at this current stage if this will still happen.
GAS prices did not explode
Yearn.finance, Curve.finance, and Aave.com have managed to perform well. There have been no liquidation issues or any other problems in terms of their capital deployment or arbitrage strategies. This brings me to the Ethereum network's GAS price. I thought that when we started seeing traders rushing for the exit door, GAS prices would explode. This did not happen. Either people are in a state of shock and did not even try to take out their investments placed in the various vaults or strategies, or they are actually fine with the fee and feel comfortable.
Is it over now? I am not sure. But in percentage terms, we have seen a fair amount of corrections. Some people claim that you can expect corrections of 60-80% in a crypto bull run. Especially when you had a parabolic upmove. From a technical chart analysis point of view, I see some damage being done. Both BTC$ and ETH$ need to show some sort of reaction now, or we will have further room to the downside.
In terms of flow, we have already seen some people jump in on Friday to buy BTC$ around the 10k area. Some players left limit orders to buy further down. Monday is Labor Day in the US, which probably will not help since we have seen some good buying interest from that part of the world lately.
On a positive note, it looks like you have a little bit of time still to do more research on your favourite project before you rush in and allocate more of your scarce capital. Make sure you have some dry powder on you in case we get another selling wave.