UNI, SUSHI, AAVE: Is it time to bet on DeFi tokens again

As most of the market’s coins recorded negative gains over the past week, the likes of Uniswap, Aave and SushiSwap managed to register upticks of 1.1%, 2.8% and 6.3% respectively. In fact, the collective sentiment of market participants towards DeFi tokens has been quite positive of late.

As per recent data from Messari, tokens associated with DEXes and DeFi platforms have, by and large, been able to outperform the currency and smart contract category. By itself, this is a remarkable feat achieved by these tokens, in conjunction.

So, is it time to bet bullish?

Projects with comparatively lower market caps , like those mentioned above, usually tend to get affected by just the entry or the exit of traders. However, the broader DeFi market has not witnessed any notable exit of late. The influx of new addresses into the space has, in fact, been quite consistent over the past few months. At the time of writing, there were 3.38 million unique DeFi addresses.


Aggregate DeFi Users || Source: Dune Analytics

Further, the aforementioned rise has been well-accompanied by a rise in trading volumes too. This factor too played a substantial role in adding to the bullish narrative.

The DeFi Index reading, additionally, made rapid strides of late. The same managed to surge from $6.6k to $11k in a span of less than three months.

Trading Volume – AAVE, SUSHI, UNI || Source: Santiment

The Market Cap/TVL data was also on the rise of late highlighting the HODLing behavior of market participants. At the time of writing, this ratio for UNI, AAVE and SUSHI stood at 2.65, 0.32 and 0.44 respectively. Thus, it can be inferred that these tokens were presenting themselves as a profitable long-term investment option at the moment.

Further, the net flow on exchanges for all the aforementioned tokens of  late, sharply dropped, implying the surge in outflows. This essentially underlines the movement of DeFi tokens into private wallets and cold storage.

On 17 September, for instance, the aggregate SUSHI volume on exchanges was as high as 4.9 million tokens. However, at the time of writing, the same reflected a value of -1.1 million.

Netflows – SUSHI || Source: IntoTheBlock

The aforementioned datasets, in conjunction, highlight the on-going accumulation trend in the DeFi market. As the demand for these tokens rise, the buy-side pressure would also rise in the coming days and, investors can expect the valuation of these tokens to parallelly hike.

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