{"id":405159,"date":"2019-11-22T05:24:06","date_gmt":"2019-11-22T05:24:06","guid":{"rendered":"https:\/\/wncen.com\/?p=405159"},"modified":"2019-11-22T05:28:14","modified_gmt":"2019-11-22T05:28:14","slug":"how-does-the-ethereum-dump-affect-defi-markets","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/ethereum\/how-does-the-ethereum-dump-affect-defi-markets\/","title":{"rendered":"How Does The Ethereum Dump Affect DeFi Markets?"},"content":{"rendered":"
It has been a grim end to the week for Ethereum. The world\u2019s number two crypto asset has held up resiliently for most of this month while Bitcoin has been eroded. That resilience ended a few hours ago when ETH prices collapsed by 9 percent.<\/p>\n
Ethereum has spent the best part of this month holding ground between $180 and $190. Bitcoin meanwhile has been eroded down from its China induced FOMO pump back to pre-spike levels this time last month.<\/p>\n
With good progress made on Istanbul, and the DeFi ecosystem<\/a> continuing to show growth and expansion, there was hope that ETH could finally begin to decouple from its big brother. Those hopes were dashed a few hours ago when Ethereum plunged into the digital abyss behind Bitcoin.<\/p>\n According to Tradingview.com<\/a> ETH prices fell from $175 to wick out at $155 before recovering to around $160 where it currently trades. The 9% dump has put prices back at long term support which held in October, September and back in early May.<\/p>\n <\/a><\/p>\n The sad thing for Ethereum is that it is likely to continue following Bitcoin on its current downward trajectory. Next key levels down are $150 and $135 and there is little point looking in the other direction at the moment.<\/p>\n Since Ethereum is shaping up to dominate decentralized finance<\/a>, how does this latest price collapse affect markets there? DeFi involves staking ETH with smart contracts into lending protocols such as MakerDAO in order to earn interest.<\/p>\n While ETH traders are being battered by bears, those involved in DeFi remain bullish. According to \u2018The Defiant<\/a>\u2019 loans originated today were at the third highest in the past month, at almost 47,000 ETH ($7 million), with almost 197,000 ETH ($31 million) supplied as collateral.<\/p>\n \u201cThose putting up ETH as collateral to back a loan on a day when it\u2019s down almost 10 percent are likely speculating the cryptocurrency will rebound.\u201d<\/p><\/blockquote>\n Around 60% of loans were for Dai<\/a>, which is often used to trade on leverage and buy more Ether. According to Defipulse.com<\/a> the total value locked in ETH jumped to a record 4 million while the amount itself also hit a record 2.5 million.<\/p>\nEffect on DeFi Markets<\/h2>\n